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Forwards recap: Term power prices aimless as fundamentals diverge

Forwardpower prices were mixed but mostly muted during the week ended Sept. 23 as gainsin natural gas futures implied modestly higher fueling costs and the onset of fallweather suggested soft demand.

In gasfutures, the front-month October contract opened the review week Sept. 19 with amodest 1.4-cent loss to settle at $2.934/MMBtu as moderating weather failed to inspirehigher moves. However, revisions to forecasts signaling sustained heat in the keycooling regions in the East and Midwest pushed the contract above the $3/MMBtu markfor the first time since May 2015 to close the Sept. 20 session at $3.047/MMBtu,rallying an impressive 11.3 cents.

Cautioustrading ahead of the weekly storage report release the next day kept gains in checkSept. 21 with front-month gas managing to add a modest 1 cent to settle at $3.057/MMBtu.The October contract's stay above the $3/MMBtu mark would be short lived Sept. 22as reports of a better-than-expected52-Bcf net injection duringthe week ended Sept. 16 pulled down front-month gas by 6.7 cents to $2.990/MMBtu.Losses extended Sept. 23 with October gas shedding another 3.5 cents to exit thereview week at $2.955/MMBtu. Despite failing to stay above the $3/MMBtu level, Octobergas managed to add 2.1 cents during the review period.

At wholesaleelectricity term markets varied but muted moves dominated packages for October deliveryas conflicting signals from slightly higher refueling costs driven by a modest uptickin gas futures clashed with subdued demand implied by incoming fall weather.

Reflectingthe week's muted sentiment and mirroring the movement in gas futures were Octoberdeals at South Path-15, which were pegged at $36.60 on Sept. 19 and $36.05 on Sept.23, dropping by 55 cents.

Otherhubs in the West also moved in different directions with Palo Verde October pricedat $28.41 on Sept. 19 and $27.97 on Sept. 23, slipping by 44 cents over the period,while term trades at Mid-Columbia added 21 cents during the week and were done at$24.53 on Sept. 19 and $24.74 on Sept. 23.

On theeastern seaboard, NEPOOL-Mass traded October power for a weekly loss of 16 centsin deals opening at $30.75 on Sept. 19 and closing at $30.59 on Sept. 23 while transactionsat New York Zone G were assessed at $30.85 on Sept. 19 and $30.09 on Sept. 23, losing76 cents for the period. Running counter to the wider decline were prompt-monthtrades at PJM West, which were quoted at $34.55 on Sept. 19 and $34.73 on Sept.23, up 18 cents.

In thecentral U.S., forward deals for October delivery leaned mixed to slightly higher.PJM AD October added 31 cents over the week in trades noted at $33.95 on Sept. 19and $34.26 on Sept. 23 while MISO Indiana exchanged October power at $34.93 on Sept.19 and $35.08 on Sept. 23, increasing by a modest 15 cents throughout the period.Defying the trend were transactions at PJM Northern Illinois where October powerchanged hands at $32.99 on Sept. 19 and $32.76 on Sept. 23, slipping by 23 centsfor the week.

In thesouth, prompt-month deals at ERCOT North were transacted $1.05 higher for the weekand opened at $27.67 on Sept. 19 and closed at $28.72 on Sept. 23.

Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power,natural gas andcoal index prices, as well asforwards andfutures, visit our Commodities Pages.