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Forwards recap: Term markets swing higher as July takes lead

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Forwards recap: Term markets swing higher as July takes lead

With July taking the lead slot, term markets across the U.S. edged higher during the week ended June 2 despite a fall in fueling costs due to losses in gas futures and deflated demand brought about by moderating weather forecasts.

In front-month gas futures, the new July contract opened the holiday truncated workweek May 30, pressured by a lack of fundamental weather support, which sent it down 16.5 cents to $3.145/MMBtu. The decline extended the next day May 31 to $3.071/MMBtu, with the contract lower by 7.4 cents.

The June 1 session saw a better-than-expected 81-Bcf net injection during the week ended May 26 exert even more downward pressure on July gas, which settled just barely above the $3.00/MMBtu support at $3.008/MMBtu, down 6.3 cents. July gas remained tethered to the downside June 2 with the contract notching a 0.9-cent loss to send it below key support to $2.999/MMBtu. Overall, from May 30 to June 2, front-month gas futures retreated by 14.6 cents.

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At wholesale electricity markets, the review week saw a transition of the prompt-month product from June to July occur June 1, which subsequently led to most markets edging higher despite a drop in fueling costs and moderating demand.

Encompassing the week's bullish sentiment were deals at New York Zone G that started out for June at $34.41 on May 30 then switched over for July at $41.97 on June 1 and $43.29 on June 2 for an $8.88 gain.

Gains were also noted in other hubs along the eastern seaboard. NEPOOL-Mass hub traded power for June at $33.61 on May 30 then July at $41.25 on June 1 and $40.09 on June 2, up by $6.48. Prompt-month power at PJM West changed hands for June at $35.34 on May 30 then July at $41.75 on June 1 and $41.61 on June 2, adding $6.26 for the week.

Hubs in the Midwest also favored the upside. Term power at PJM AEP-Dayton was exchanged from June at $34.50 on May 30 then July at $41.90 on June 1 and $41.75 on June 2, for a $7.25 weekly increase. At PJM Northern Illinois, term packages started out for June at $34.01 on May 30, which transitioned over to July at $40.03 on June 1 and $40.00 on June 2, for a premium of $5.99. MISO Indiana term deals for June came in at $35.37 on May 30 with July pegged at $39.96 on June 1 and $41.00 on June 2, adding $5.63 for the period.

In Texas, term power at ERCOT North was assessed for June at $32.01 on May 30, transitioning to July at $39.37 on June 1 and $39.45 on June 2, adding $7.44 during the week.

Over on the West Coast, flat to higher moves were seen. Mid-Columbia deals were done for June at $20.63 on May 30 then July at $26.11 on June 1 and $25.49 on June 2, increasing by $4.87 during the period. Palo Verde trades entered the week for June at $34.65 on May 30, turning over to July at $38.05 on June 1 and $38.14 on June 2, up by $3.49 for the week. A gain of 6 cents was noted at South Path-15 with prompt-month power quoted for June at $34.70 on May 30 then July at $34.91 on June 1 and $34.76 on June 2.

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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.