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Forwards recap: US term power markets flounder as winter transitions to spring

Q3: U.S. Solar and Wind Power by the Numbers

Path to Carbon-Free Power Generation by 2035

The Growing Importance of Data Centers for European & U.S. Renewable Projects

CAISO and ERCOT Power Forecasts by the Hour


Forwards recap: US term power markets flounder as winter transitions to spring

Moderating demand as winter changes over to spring combined with a drop in natural gas futures sent term power markets across the U.S. lower during the week ended March 16.

In the gas futures arena, the front-month April contract kicked off the review week March 12 with weather support as forecasts indicated lingering cold weather late into March, which allowed it to notch a 4.6-cent gain to rise to $2.778/MMBtu. The following session March 13, however, saw a revision in weather projections that limited the April contract's increase to a 0.8 cent to $2.786/MMBtu.

As market participants looked to the impending arrival of spring, the further erosion of support sent April gas back into the red March 14 as the contract posted a 5.5-cent loss to $2.731/MMBtu. Following reports of a 93-Bcf net withdrawal during the week ended March 9, which was below consensus estimates but mixed against historical averages, the April contract continued to flounder March 15 with bears pulling down front-month gas by 5.0 cents to $2.681/MMBtu.

The March 16 session saw front-month gas holding on to forecasts for lingering cold, which allowed it to exit the review period with a scant 0.7-cent gain at $2.688/MMBtu. Despite closing the review week in shallow positive territory, front-month gas still fell 9.0 cents from March 12-16.

The combination of lower fueling costs and moderating demand brought about by spring weather sent wholesale electricity markets tumbling over the review week.

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Encompassing the review period's predominantly bearish sentiment was term action at ERCOT North, which was pegged at $29.80 on March 12 and at $28.91 on March 16 for a 3% weekly decline.

Hubs in the central U.S. also leaned flat to lower following a lack of fundamental support. April power at MISO Indiana was valued at $35.13 on March 12 and $33.60 on March 16 for a 4% weekly loss. PJM Northern Illinois saw prompt-month value at $29.70 on March 12 and $28.59 on March 16, about 4% lower over the period. The April product at PJM AEP-Dayton saw limited change, declining 6 cents for the week, from $35.04 on March 12 to $34.98 on March 16.

On the eastern seaboard, losses also defined term activity. In the mid-Atlantic, April power prices at PJM West were assessed at $36.22 on March 12 and $34.00 on March 16, down 6% over the period. In the Northeast, New York Zone G saw April power pegged at $34.32 on March 12 and $32.68 on March 16, for a 5% weekly decline. April power prices at the New England Mass hub declined 88 cents over the week and were assessed at $36.06 on March 12 and $35.18 on March 16.

On the western side of the country, term markets were mixed but still held a downward bias. In California, prompt-month power was pegged at $28.42 on March 12 and $26.45 on March 16, down 7% over the period. A loss of 15 cents was seen in the Northwest with Mid-Columbia value pegged at $16.50 on March 12 and $16.35 on March 16. Defying the trend were markets in the Southwest with April packages at Palo Verde valued at $26.27 on March 12 and $26.81 on March 16, up 2% throughout 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.