Energy Market Analysis – 05-03-2013 5th March, 2013 Nick Boyle
Production at the Nyhamna processing plant was down yesterday after a failure in the Norwegian national power grid – which led to overall Norwegian output falling by a considerable 64 mm cm compared to Friday’s level.
As a result of this, flows to the UK were 34 mm cm lower – so we saw a tighter system and a surge in NBP within-day prices; which reached record levels.
Today, Norwegian output is a little lower than yesterday – which confirms the Gassco announcement that the outage won’t ease until Tuesday.
Turning to European power, yesterday’s German OTC spot prices fell after a rise in solar output and the decline in consumption on the back of warmer weather. Meanwhile, French OTC prices remained fairly stable – which could be down to a renewed plant outage at a nuclear power station along with a rise in clean gas costs.
How did the energy markets close?
We saw more difficulties for gas flows yesterday, as Langeled fell a further 35mcm. The drop is thought to be down to a power cut at a gas plant along with poor weather in the North Sea.
As a result of this, the lack of supply led to the prompt moving up and WD trading higher than the 110ppt mark.
Power’s Day-Ahead saw more movement, closing above £65.00/MWh. What’s more, the System Buy Price peaked at £206/MWh as a 500MW nuclear reactor was taken offline and isn’t expected to restart until next week.
How did the energy markets open?
Prompt gas dropped back a little this morning after the system opened long. At the same time, Day-Ahead gas dropped almost 4.00ppt.
Elsewhere on the curve, the highest gains were seen on the Front month; which opening trading up 0.55ppt.
Following yesterday’s gains, power’s Day-Ahead dropped £11.25/MWh – returning to levels seen on Friday. Further out on the curve, prices seemed to firm – with April13 rising £0.45/MWh and S13 gaining £0.40/MWh.
1-year forward prices
Market close data revealed a slight rise in the 1-year forward prices of business gas and business electricity – which are now trading at 69.28ppt and £52.90/MWh respectively.
Latest Brent Crude Oil prices
Brent Crude recovered slightly to open at $110.8/bbl this morning.
Today’s focus turns to PMIs in services in the Eurozone and in the US (ISM) – but these shouldn’t have huge effects. Look out for API inventory data that is due for release this evening.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.