Weekly Energy Market Updates by Region - Archive

Issue week: March 19th, 2020  (Wk 12)

POWER MARKETS

WEST Spot prices have increased recently because of a late winter storm. To say that the significant cloud cover from the storm has made it difficult for grid operators to forecast the amount of behind-the-meter solar generation available on the grid is an understatement, considering that, for example, the Real Time average on March 12 was around $114/MWh. In the term market, forward prices for the balance of the year have dropped on expectations of lower demand.

ERCOT  Term prices have been down over the week; the Summer 2020 on-peak price has dropped by nearly $45/MWh from just one month prior! However, real-time prices remain resilient in the low $20s/MWh to mid-$20s/MWh in all zones except the West Load Zone, where the MTD average is nearly $70/MWh. Last week featured a few instances of early cooling load during seasonal maintenance for certain baseload units, yielding several triple-digit price intervals this week.

EAST In response to COVID-19, futures have gone down in the front of the curve while curves for coming years have remained flat for the most part. Terms from 3 to 6 months have dropped by more than $1/MWh. For instance, 3-month terms in Mass Hub and NYISO Zone G have dropped by $1.45/MWh and $1.26/MWh, respectively, from last week. In those same regions, 6-month terms have dropped by $1.27/MWh and $1.08/MWh, respectively.

NATURAL GAS 

The EIA reported Thursday morning that, for the week ending March 13, U.S. inventories decreased by 9 Bcf, validating analysts’ predictions, which ranged from a withdrawal of 14 Bcf to an injec-tion of 7 Bcf. Total stockpiles now stand at 2,034 Bcf, up by 76% from a year ago and 16% above the five-year average for the same week.

After the April NYMEX contract closed near $1.60/MMBtu yesterday and the EIA reported such a meager draw-down for last week, many ex-pected that term to drop further into the $1.50s/MMBtu. However, because some analysts were expecting an even smaller extraction of 6 Bcf, the news turned out to be rather bullish. Within the half-hour following the report, April traded at $1.644/MMBtu, approximately $0.04/MMBtu higher than Wednesday’s final. Additionally, all active months through March 2022 traded above yesterday’s close.