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Forwards recap: Term prices swing lower as November gas takes lead

Prompt-monthpower packages for October delivery remained on the defensive during the week endedSept. 30 with the retreat driven by a reduction in fueling costs implied by lossesin natural gas futures alongside moderating demand suggested by weather outlooks.

In gasfutures trading, the front-month October contract opened the review week Sept. 26on the upside with a gain of 4.2 cents to a settle near the psychologically important$3/MMBtu mark at $2.997/MMBtu encouraged by prospects of strong demand and a slowdownin natural gas production eliminating storage overhangs through the remainder ofthe injection season. Moves to break the resistance on Sept. 27 resulted in a 0.1-centloss to close at $2.996/MMBtu with options expiring that same day.

Lossescontinued to drive October gas as the contract rolled off the board during the midweekSept. 28 session as $2.952/MMBtu, down 4.4 cents, with the soon-to-be front-monthNovember contact falling by 4.8 cents to settle at $3.002/MMBtu.

The Novembercontract's debut session Sept. 29 was marked by reports of a 49-Bcf net injection during the week ended Sept. 23, whichdespite being price-bullish was countered by revisions to forecasts signaling decliningdemand ultimately pushing front-month gas down to $2.959/MMBtu, slipping by 4.3cents.

Sellingpressures extended Sept. 30 with November gas dropping another 5.3 cents to exitthe review week at $2.906/MMBtu. Overall, with the transition from October to November,front-month gas retreated by 9.1 cents during the review week.

Acrossforward power markets, packages for October delivery stayed in the negative owingto a dearth of support from lower fueling costs caused by a drop in gas futuresand subdued demand signaled by weather forecasts.

Postingthe biggest decline during the review week were term trades at New York Zone G,which opened at $30.38 on Sept. 26 and closed at $26.25 on Sept. 30 for a weeklyloss of $4.13.

Elsewhereacross the eastern seaboard, power packages ticked lower as well. NEPOOL-Mass Octoberwas pegged at $31.19 on Sept. 26 and $29.55 on Sept. 30, down $1.64, while a week-on-weekdecline of $2.65 was seen at PJM West, where October power was exchanged at $35.58on Sept. 26 and $32.93 on Sept. 30.

Midwesternmarkets leaned flat to lower. Prompt-month trading activity at PJM AD was assessedat $35.11 on Sept. 26 and $32.13 on Sept. 30, slipping by $2.98 over the period,while PJM Northern Illinois transacted October power at $33.14 on Sept. 26 and $31.58on Sept. 30 for a weekly decline of $1.56. MISO Indiana was able to minimize lossesto 70 cents in deals done at $35.00 on Sept. 26 and $34.30 on Sept. 30.

Termpackages in Texas fared no better with ERCOT North slipping by 49 cents during thereview period with October power changing hands at $28.66 on Sept. 26 and $28.17on Sept. 30.

Lossesalso enveloped term trading along the West Coast. Mid-Columbia in the Northwestshed 44 cents over the week and opened at $24.47 on Sept. 26 and closed at $24.03on Sept. 30. Palo Verde in the Southwest slipped by $1.76 with October power transactedat $28.68 on Sept. 26 and $26.92 on Sept. 30. In California, South Path-15 Octoberdecreased by $1.58 during the period with packages starting at $36.31 on Sept. 26and ending at $34.73 on Sept. 30.

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.