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Forwards recap: East, Midwest term values plunge with gas futures

Power prices along the forward curve were swept lower in the week ended Dec. 16 as medium-term weather outlooks pointed to a return to mild weather and the natural gas futures front-month contract returned a lot of its previous gains.

Term power markets in the week ended Dec. 16 began the week pressured by the natural gas market but with some markets reclaiming losses in the second half of the week as the gas futures losses stalled momentarily.

January 2017 natural gas started the week on a bearish note with a loss of 23.9 cents Dec. 12, but the losses slowed Dec. 13 with a decline of 3.3 cents and reversed slightly higher Dec. 14 with a gain of 6.6 cents.

However, the gas market returned to the downside Dec. 15 as the January 2017 contract fell 10.6 cents after the U.S. Energy Information Administration reported a bigger-than-expected 147-Bcf natural gas storage withdrawal for the week ended Dec. 9 and continued lower in the week's final session Dec. 16 with a loss of 1.9 cents. The January 2017 contract fell a collective 33.1 cents in the five days ended Dec. 16 with most of those losses occurring on Dec. 12.

In power trading, front-month deals for January 2017 flow mostly tracked the movement of the natural gas market, remaining under pressure for much of the week.

January 2017 power deals at the NEPOOL Mass hub began the week above $77 and dropped almost $5 on Dec. 13, where it stabilized for a day before careening to near $68 by the end of the week, down 12% on the week.

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Likewise, PJM West in the Mid-Atlantic saw hefty losses, starting the week above $55 and ending near $46.50, down 16% for the week.

Neighboring Midwest markets also saw January 2017 power prices fall hard during the week as the PJM Northern Illinois hub began the week near $46 and finished below $38 by Dec. 16, down 17% for the week, and front-month deals at PJM AEP-Dayton fell 18% on the week, beginning just below $49 and ending Dec. 16 below $40. The MISO Indiana hub held firm despite the gas losses, trading in the mid-$40s all week.

In Texas, January 2017 power prices at ERCOT North eased a meager amount over the course of the week with most deals done in the low $30s.

In the West, Mid-Columbia in the Northwest ended the week more than $1 lower than where it began, trading just below $31 early in the week before ending the week near $29.50, down 4% during the week. South Path-15 ended less than $1 lower on the week, near $37, down just 2%, while Palo Verde in the Southwest also lost less than $1 throughout the week with action pegged near $30.

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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.