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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region-Archive

 

 

 


Issue week: October 29th, 2020  (Wk 44)

 

POWER MARKETS

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WEST Strong winds and wildfires across California have necessitated power shutoffs for thousands of customers and made index prices quite volatile. More-over, approximately 18,000 MW of resources remain offline for planned mainte-nance. Any heat event during early November could drive Day-Ahead prices up. In the term market, prices in CAISO have reversed their upward trend and moved slightly down along with NYMEX. Forward prices have also fallen in the Pacific Northwest on word of increased natural gas capacity before winter begins.

ERCOT  Term prices have been mostly flat to down throughout the curve as term heat rates and natural gas have been mixed. Real-time prices have also been low for most days this week, save October 26, when operators curtailed wind output because of weather threats from a front moving south into Texas which happened to bring cloud cover that also reduced solar output. Conse-quently, the real-time average is nearly $230 / MWh for the on-peak hours. In addition, the ORDC adder for the month is now over $4/MWh, well above the $3/MWh and $1 / MWh for October 2019 and October 2018, respectively.

EAST Prices have continued to pick up this week amid the colder weather but are generally still soft. The DART spread in ISO-NE is averaging only $11/MWh in the on-peak hours this week, although RT was as much as $60/MWh over DA yester-day, thanks to strong load over-performance cloud coverage that reduced be-hind-the-meter generation, and marginal wind and hydro production.

NATURAL GAS 

The EIA reported Thursday morning that, for the week ending October 23, U.S. inventories increased by 29 Bcf, approaching the sweet spot of the 17-45 Bcf predicted by the analysts. Total stockpiles now stand at 3,955 Bcf, up by 7.8% from a year ago and 7.9% above the five-year average for the same week. The December NYMEX contract, now the front month, was trading slightly below yesterday’s close by $0.009/MMBtu at $2.666/MMBtu as of 10:00 a.m. PDT. All months from January 2021 through September 2022 were also down by trace amounts as forecasts of weather warmer than normal over the next couple of weeks appear to have tempered the expected upward price re-sponse to the smaller-than-expected storage injection. Basis at the California points traded slightly higher today; the Novem-ber 2020 price at SoCal Border price was up by more than $0.15/MMBtu. October 2020 cash prices were also higher at PG&E and SoCal Citygates amid the recent cold weather in the Golden State.

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