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Forwards recap: September power packages firm with gas support

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Forwards recap: September power packages firm with gas support

Moderating demand forecasts signaled by weather forecasts were counterbalanced by higher fueling costs brought about by gains in gas futures and provided power packages for September delivery with a boost during the week ended Aug. 11.

At the gas futures arena, technical buying amid oversold conditions allowed the front-month September contract to open the review week Aug. 7 with a 2.7-cent gain to rise to $2.801/MMBtu, which extended further by 2.1 cents to $2.822/MMBtu on Aug. 8. Short covering during the midweek Aug. 9 session lifted front-month gas 6.1 cents to $2.883/MMBtu ahead of the following day's release of storage data from the U.S. Energy Information Administration.

Reports of a less-than-expected 28-Bcf net injection during the week ended Aug. 4 sent September gas surging Aug. 10 by 10.2 cents to close at $2.985/MMBtu. However, the winning streak came to a halt Aug. 11 as the market searched for direction amid a dwindling supply-demand balance and overall healthy inventories, causing front-month gas to exit the workweek with a scant 0.2-cent loss to $2.983/MMBtu. Despite the modest downtick, front-month gas still advanced by 18.2 cents overall during the review week spanning Aug. 7-11.

Flat to predominantly higher moves defined trading activity at wholesale electricity markets with gains encouraged by a rising fueling costs.

Closely following the movement in gas futures was the New England Mass hub, where September power changed hands at $29.40 on Aug. 7 and $31.23 on Aug. 11, up by $1.83 during the week.

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Other eastern markets were biased higher as well. September power at New York Zone G was priced at $30.41 on Aug. 7 and $31.78 on Aug. 11, adding $1.37 during the week, while a gain of 41 cents was posted at PJM West, where September deals were done at $32.21 on Aug. 7 and $32.63 on Aug. 11.

In Texas, forward power prices at ERCOT North were pegged at $28.15 on Aug. 7 and $30.21 on Aug. 11, up by $2.06 during the week.

Western term markets also moved flat to ultimately higher. Palo Verde September changed hands at $28.68 on Aug. 7 and $30.64 on Aug. 11, adding $1.96 over the period. Prompt-month power at South Path-15 notched an 80-cent gain with packages traded at $37.79 on Aug. 7 and $38.59 on Aug. 11. Term transactions at Mid-Columbia were up 53 cents week on week with power deals noted at $27.08 on Aug. 7 and $27.61 on Aug. 11.

Midwestern power prices were mixed but muted overall despite higher fueling costs. Front-month deals at PJM AEP-Dayton were near unchanged with September power packages exchanged at $32.84 on Aug. 7 and $32.83 on Aug. 11, down a penny for the week. MISO Indiana September added 6 cents during the period and was quoted at $33.92 on Aug. 7 and $33.98 on Aug. 11. PJM Northern Illinois September began the review week at $31.61 on Aug. 7 and closed at $31.73 on Aug. 11, dropping 12 cents in the process.

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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.