From a temperature perspective, weather remained quite mild over the past week. The reported natural gas storage withdrawal exceeded expectations, as well as the 5-year average value for the week. Market movement on the power side remained very minimal for futures strips, however hefty drops in weekly LMP averages were seen in both NEPOOL and NYISO.
While backwardation has narrowed in every region but California, long-term positions remain attractive across the board, particularly in NY, PJM, and ERCOT, where CY futures sit below $30/MWH for each of the next three years.
The current calm in the market presents excellent opportunity for budget-conscious customers to secure fixed positions into 2023 and beyond. Our long-term outlook identifies more risk of upward movement than downward favorability.
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