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Forwards recap: ERCOT summer power prices continue to soar

Editor's Note: Please be advised that S&P Global Market Intelligence will no longer publish daily articles on price trends in the U.S. natural gas, electricity and emissions markets beginning June 1, 2018. Pricing data for these energy markets will continue to be available on the Market Intelligence platform.

Term electricity prices across most of the U.S. moved higher during the second week of May as gains in the natural gas futures market added an undercurrent of support.

The June natural gas futures contract crawled higher throughout the week, topping $2.80/MMBtu by May 10 and ending the week at $2.806/MMBtu, up 9.5 cents week on week.

As forecasts point to a nail-biting supply-demand balance in the peak demand, summer months helped propel power forwards in Texas. The front-month product at the North location of the Electric Reliability Council of Texas was pegged in the mid-$50s by week's end, up more than $5, or 11%, week on week.

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Further out, power at ERCOT North was valued at $125.12 for July and $229.08 for August, up more than $18 and more than $26 week on week, respectively.

Term electricity markets elsewhere in the U.S. trended mostly higher; however, the gains were generally slight, while some Southwest markets steered lower.

In the East, the New England Mass hub and the PJM Western hub in the mid-Atlantic tacked on less than $1 on the week, holding in the high $20s and mid-$30s, respectively.

In the Midwest, values for June power ranged from the low $30s at the Northern Illinois hub to the mid-$30s at the PJM AEP-Dayton hub and the MISO Indiana hub. All three locations saw prices rise by less than $1 on the week.

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In the West, June power products at Palo Verde and South Path-15 declined by almost $2 apiece, as Palo Verde ended the week near $36.50 and South Path-15 finished near $35. Pressured by a flood of cheap hydropower supplies, June power prices at Mid-Columbia remained the lowest for the whole country in the mid- to upper teens, rising less than $1 on the week.

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Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas and coal index prices, as well as forwards and futures, visit our Commodities pages.