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Forwards recap: December power packages slip over holiday-truncated workweek

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Forwards recap: December power packages slip over holiday-truncated workweek

Power packages for December delivery shifted lower during the week ended Nov. 24 following a decline in fueling costs in line with weaker natural gas futures and milder weather forecasts.

In gas futures trading, activity was marked by losses Nov. 20 with the front-month December contract led lower by supply-side pressures from ample storage and closing the day down 5.0 cents to $3.047/MMBtu. The downtick was extended Nov. 21 with front-month gas ending the session 3.0 cents lower to $3.017/MMBtu.

Due to the Thanksgiving holiday on Nov. 23, the U.S. Energy Information Administration released its weekly inventory report a day early Nov. 22, showing a less-than-expected 46-Bcf net withdrawal during the week ended Nov. 17, which added pressure on front-month gas, causing prices to fall 4.9 cents to $2.968/MMBtu.

With the futures markets closed for Thanksgiving on Nov. 23, trading resumed on Nov. 24 with December gas retreating 15.5 cents to settle at $2.813/MMBtu. Overall, front-month gas tumbled by 23.4 cents during the holiday shortened review week spanning Nov. 20-24.

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Losses in gas futures implied a decline in fueling costs, which along with moderating weather forecasts kept term power markets lower during the review week.

Closely mirroring the movement in gas futures, term deals at the New England Mass hub were done at $50.48 on Nov. 20 and $47.39 on Nov. 24, down 6% for the week.

Other markets in the East followed suit with New York Zone G December slipping 7% week on week and changing hands at $44.33 on Nov. 20 and $41.13 on Nov. 24. PJM West transactions also noted a weekly loss of 7% with term values seen at $35.54 on Nov. 20 and $32.89 on Nov. 24.

Markets in the Midwest turned lower as well. PJM Northern Illinois term power was priced at $31.43 on Nov. 20 and $29.52 on Nov. 24, down 6% for the period. PJM AEP-Dayton hub saw December power transacted at $33.96 on Nov. 20 and $32.37 on Nov. 24, down 5% throughout the review week. Prompt-month packages at MISO Indiana opened at $33.26 on Nov. 20 and closed at $31.99 on Nov. 24, shedding 4% over the period.

Along ERCOT North's forward curve, December power packages were pegged at $24.47 on Nov. 20 and $22.22 on Nov. 24, down 9% during the week.

In the West, power packages were varied. Prompt-month power at Mid-Columbia entered the review week at $32.75 on Nov. 20 and exited at $30.80 on Nov. 24, down 6% week on week. Palo Verde transactions fell roughly 6 cents and were valued at $32.47 on Nov. 20 and $32.41 on Nov. 24. Defying the almost nationwide downtrend, December transactions at South Path-15 were posted at $44.27 on Nov. 20 and $45.26 on Nov. 24, up 2% over 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 and natural gas index prices, as well as forwards and futures, visit our Commodities pages.