[Market Update] The Market Continues to Weigh the Economic Impact That COVID-19 Is Having on Demand, While at the Same Time Weighing the Impact That a Steady Decline in Oil and Gas Rigs Might Have Going Forward
The Great Lake Region’s forward power prices have leveled off a bit this week after a steady week-over-week increase since Mid-March.
The market continues to weigh the economic impact that COVID-19 is having on demand, while at the same time weighing the impact that a steady decline in oil and gas rigs might have going forward. Those supply expectations have provided consistent price support for forward gas and power prices up to this point, over the past two months.
Forward power prices in the Midwest through 2025 were relatively unchanged this past week, with the exception of calendar years 2021 and 2022, which were up 1%.
Over the past month, prices throughout the forward price curve were higher by 3%, on average. The calendar 2021 strip has seen the largest increase month-over-month at 5%, while 2025 has increased only 2%.
Increases above the all-time lows continue to creep up as well, with 2021 posting a price that is 12% off the low for that contract year, while 2025 is still about 7% higher than its low.
Day-ahead index power prices in MISO were down 28% and load was lower by 9% year-over-year for the month of April. Month-over-month index power prices dropped 5% from March to April of this year as the load dropped as well, by 10% for that same period.
