trending Market Intelligence /marketintelligence/en/news-insights/trending/WaBSRsITstWPDB7pBA7rPA2 content esgSubNav
In This List

Forwards recap: Most term markets favor gains; West values sag

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


Forwards recap: Most term markets favor gains; West values sag

Term electricity markets around the U.S., with the exception of those in the West, turned higher during the week ended Dec. 1 encouraged by gains in natural gas futures and a shift in prompt-month products from December to January 2018.

Following losses the week prior, action in the natural gas futures arena was pointed upward Nov. 27 with the front-month December contract spending its penultimate session in the lead by rebounding 11.5 cents to rise to $2.928/MMBtu as options expired the same day. The next day Nov. 28, the December contract found support in short covering, allowing it to roll off the board 14.6 cents higher at $3.074/MMBtu with the upcoming January 2018 contract not far behind as it notched an 11.1-cent increase to settle at $3.128/MMBtu.

Supportive weather forecasts bolstered the new front-month contract in its debut session Nov. 29 helping it add 5.1 cents to climb to $3.179/MMBtu. Gains, however, came to a halt Nov. 30 due to a less-than-expected 33-Bcf net withdrawal during the week ended Nov. 24 pulling down January 2018 gas by 15.4 cents to $3.025/MMBtu. Yet, the January 2018 contract managed to regain its footing Dec. 1 as weather outlooks gave front-month gas prices a small nudge to $3.061/MMBtu, closing the workweek 3.6 cents higher. Overall, with the transition of products from December to January 2018 delivery, front-month gas managed to add 13.3 cents during the week spanning Nov. 27 to Dec. 1.

SNL Image

Gains in gas futures suggested a rise in fueling costs, which alongside a transition of prompt-month products from December to January 2018 occurring on Dec. 1, provided a lift for most wholesale electricity markets around the U.S., excluding hubs in the West.

The New England Mass hub noted the biggest increases with power packages adding $29.50 during the week and trading for December at $50.74 on Nov. 27 and $63.85 on Nov. 30 then January 2018 at $80.24 on Dec. 1.

Prices at other locations along the eastern seaboard ticked higher as well. A $26.20 weekly gain was seen at New York Zone G with deals opening for December at $43.82 on Nov. 27 and $51.55 on Nov. 30 then changing over to January 2018 at $70.02 on Dec. 1. Term trades at PJM West kicked off the week for December at $34.85 on Nov. 27 and $41.53 on Nov. 30 before switching over for January 2018 at $47.18 on Dec. 1, rising by $12.33 overall.

In the central U.S., term products also notched modest premiums with supportive fundamentals. PJM Northern Illinois saw power for December change hands at $31.10 on Nov. 27 and $36.16 on Nov. 30 then January 2018 at $37.79 on Dec. 1 for a $6.69 weekly gain. PJM AEP-Dayton saw power for December priced at $34.23 on Nov. 27 and $38.25 on Nov. 30 then switching over to January 2018 at $40.90 on Dec. 1 for a $6.68 weekly premium. MISO Indiana saw power for December priced at $33.74 on Nov. 27 and $37.10 on Nov. 30 then changing to January 2018 at $38.57 on Dec. 1, up by $4.83 during the period.

Along ERCOT North's forward curve, December packages were noted at $24.30 on Nov. 27 and $25.72 on Nov. 30 before transitioning to January 2018 at $27.45 on Dec. 1, up $3.15 week on week.

Running counter to the almost nationwide uptick were term markets in the West, which defied higher fueling cost and favored losses. In the Southwest, Palo Verde deals were done for December at $37.09 on Nov. 27 and $30.35 on Nov. 30 then January 2018 at $29.04 on Dec. 1, down $8.05 for the week. In California, South Path-15 prompt-month packages changed hands at $51.29 on Nov. 27 and $60.00 on Nov. 30 then transitioning to January 2018 values at $45.89 on Dec. 1 for a $5.40 week-on-week loss. In the Northwest, Mid-Columbia saw term power for December trades at $34.60 on Nov. 27 and $32.37 on Nov. 30 then January 2018 at $28.98 on Dec. 1, decreasing by $5.62 over the period.

SNL Image

SNL Image

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.