Term power markets across the U.S. took a few steps back during the week ended Dec. 8 following a decline in fueling costs in line with gas futures, as well as lackluster demand forecasts implied by weather forecasts.
At the natural gas futures arena, bearish supply-side fundamentals fueled losses for the front-month January 2018 contract on Dec. 4, leading the market 7.6 cents lower to $2.985/MMBtu, which continued the next day Dec. 5 by 7.1 cents to $2.914/MMBtu. The midweek Dec. 6 session brought some respite to front-month gas prices, allowing the January 2018 to notch a 0.8-cent gain to settle at $2.922/MMBtu.
However, following reports of a 2-Bcf net injection during the week ended Dec. 1, which defied both consensus estimates and historical averages, January 2018 gas resumed its fall Dec. 7, closing the session down 15.9 cents at $2.763/MMBtu. Modest weather support helped stop losses Dec. 8 with January 2018 gas exiting the workweek up 0.9 cent at $2.772/MMBtu. Overall, the January 2018 contract lost 21.3 cents during the review period spanning Dec. 4-8.

The decline in futures usually translates to a drop in fueling costs, which combined with that lackluster demand that should come with mild weather forecasts, pulled down wholesale electricity markets during the review week.
Closely following the movement of gas futures were January 2018 trades at New York Zone G, which started the week at $71.27 on Dec. 4 and ended at $67.09 on Dec. 8, down 6% for the week.
Other markets in the East fared no better. Term power at the New England Mass hub changed hands at $81.81 on Dec. 4 and $78.75 on Dec. 8, around 4% lower during the period. PJM West term packages were valued at $46.60 on Dec. 4 and $43.52 on Dec. 8, dropping 7% week on week.
Hubs in the Midwest also turned lower amid lackluster fundamentals. January 2018 power at PJM AEP-Dayton was priced at $40.49 on Dec. 4 and $37.83 on Dec. 8, down 7% for the period, while prompt-month values at PJM Northern Illinois sank by 9% over the week in trades done at $37.74 on Dec. 4 and $34.31 on Dec. 8. Term power at MISO Indiana was quoted at $39.06 on Dec. 4 and $36.89 on Dec. 8, dropping 6% throughout the week.
In Texas, ERCOT North valued January 2018 power at $27.01 on Dec. 4 and $25.02 on Dec. 8, slipping by 7% over the review week.
Western power markets saw flat to higher moves. South Path-15 and Mid-Columbia saw January 2018 transactions drop 3% to 4% during the week and were priced at $41.93 on Dec. 4 and $40.69 on Dec. 8 at the former and $28.58 on Dec. 4 and $27.34 on Dec. 8 at the latter. Palo Verde January 2018 power was transacted at $27.80 on Dec. 4 and $27.60 on Dec. 8, about 20 cents lower during the period.


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 and natural gas index prices, as well as forwards and futures, visit our Commodities pages.
