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Dailies retreat on soft demand outlooks, cheap gas prices


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Dailies retreat on soft demand outlooks, cheap gas prices

A combination of declining Friday demand forecasts andlower spot natural gas prices sent most next-day power markets across thecountry careening to the downside Thursday, July 14.

Reports of a better-than-expected64-Bcf net injectionduring the week ended July 8 drove the front-month August natural gas futurescontract down 1.0 cent to close the day at $2.727/MMBtu. Likewise, most spotnatural gas markets, excluding Transco Zone 6 New York, traded lower.

In a July 14 forecast from, thecentral U.S. may see triple-digit temperatures surge into the region next week.

ERCOTdailies defy waning demand, gas losses

Downward pressures from sluggish Friday demandoutlooks and soft spot natural gas prices did little to stop power values inTexas from notching gains Thursday.

ERCOT projects demand to peak at 66,896 MW on Friday,down by 560 MW from Thursday. However, next-day deals at ERCOT North wereunimpressed by the weak load outlook and power was exchanged at a premium above$2 in the low $30s.

Regional day-ahead markets also ran counter to lowerload forecasts, with most hubs gaining more than $5 from midweek to rise toaverages of $38.23 at ERCOT Houston, $34.62 at ERCOT North, $36.33 at ERCOTSouth and $34.70 at ERCOT West.

MostEast dailies sag, NEPOOL-Mass values firm

Next-day power markets in the East, with the exceptionof NEPOOL-Mass, favored the downside Thursday, owing to forecasts calling fordeclining Friday demand and little support from varied spot gas prices.

In the Mid-Atlantic, deals at PJM West lost around $5from the midweek and were heard in the low $40s, while New York Zone G tradeseased by less than a dollar and ranged in the mid-$40s. Defying the trend werenext-day transactions at NEPOOL-Mass, which added less than a dollar and weredone in the mid- to high $40s.

Most Northeastern day-ahead markets ran the other wayof their next-day counterparts, with NEPOOL-Mass, New York Zone G and New YorkZone J rising by more than $10 to averages of $51.88, $52.19 and $56.78,respectively, while DAMs at New York Zone A tumbled close to $15 and averaged$45.82.

Demand in the Northeast is mixed, with New Englandanticipating a Friday high at 23,650 MW, up 900 MW from Thursday, while load inNew York could reach 28,523 MW on Friday, down close to 30 MW from Thursday.

Mid-Atlantic load outlooks are aimed lower with thePJM Mid-Atlantic region expecting Friday demand to hit a high at 52,457 MW,dropping 890 MW from Thursday while the PJM Western region projects Friday loadto crest at 63,932 MW, falling by more than 7,400 MW from the day prior.

MostWest values biased lower in revised trade, Mead dailies steady

Trading activity along the West coast was defined bymodest losses Thursday, as expectations of deflating Friday load and softweekend demand associated with next-day schedule revisions conspired witheasing gas prices.

Power deals done in the West were for the combineddelivery days of July 15-16, with typically sagging weekend demand bogging downvalues. In California, South Path-15 deals tumbled by around $5and were done in the low to mid-$30s, while in the Northwest losses of $3 to $4enveloped on-peak trades at Mid-Columbia and COB, which ranged in the low tomid-$20s and mid-$20s, respectively. Down in the Southwest, Palo Verde shedabout $2 on the session, with power deals exchanged in the low to high $30s.Mead transactions defied the wider decline and added close to a dollar in themid-$30s.

The California ISO is calling for Friday demand topeak at 39,870 MW, down by around 300 MW from Thursday.

Midwestmarkets slip with retreating fundamentals

A dearth of fundamental support caused by subduedFriday load outlooks and losses in spot natural gas prices drove dailies in theMidwest down Thursday. Seeing most of the action for the session was the PJMAEP-Dayton hub, which traded about $5 lower in deals ranging in the mid-$30s.

PJM regions in the Midwest anticipate decliningdemand, with peak Friday load in the PJM AEP region potentially reaching 19,461MW, down by more than 1,000 MW from Thursday, while the PJM ComEd region shouldsee Friday demand top out at 14,650 MW, plunging by more than 4,300 MW from theprevious day.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power, naturalgas and coal indexprices, as well as forwards and futures,visit our Commodities Pages.