Energy Market Analysis – 14-03-2013 14th March, 2013 Nick Boyle
After a strong start yesterday, NBP gas spot and near curve prices fell throughout the day – as demand was revised down. NBP ICE April 2013 pushed higher to reach 70.250ppt before closing at 69.180ppt.
Today’s UK NTS gas demand is expected to fall a further 15 mm cm compared to yesterday. What’s more, with temperatures expected to rise in Europe from tomorrow, April 2013 prices could fall again.
Power’s spot fundamental outlook is almost unchanged. The low temperatures we’ve been experiencing across Europe are supporting higher electricity consumption as well as market prices – but weather conditions are expected to return to normal towards the weekend.
How did the energy markets close?
Following a fall in demand and a leap in European flows, NBP Day-Ahead gas plummeted yesterday. Out on the curve, we saw a bearish turn in prices despite worries over the Rough storage facility and other supply issues.
Power’s Summer-13 fell from its high (that hadn’t been seen since March 2012) yesterday – following its weaker gas counterpart. However, on the prompt, Day-Ahead power gained £2/MWh to close up at £71/MWh – which is a fresh high for this year.
How did the energy markets open?
Another fall was registered for Day-Ahead gas this morning, opening trading at 77ppt on the back of the usual Friday fall in demand. Out on the far curve, S-13 dropped to open up at 65.85ppt while W-13 fell to 72.5ppt.
Power’s Day-Ahead fell quite sharply from its yearly high of £71/MWh, opening at £55.75/MWh – following its gas counterpart and the usual drop in Friday demand.
1-year forward prices
The 1-year forward prices for business gas and business electricity have both suffered a fall after two days of increases. These commodities now are now trading at 69.53ppt and £53.08/MWh respectively.
Latest Brent Crude Oil prices
Again, Brent prices and timespreads maintained their falling trend yesterday – with Apr13 even breaking into the $107/bbl field.
The IEA monthly report showed global oil demand has been revised down 60 kb/d for the year. Short-term drivers include heavy maintenance at new Chinese refineries – which are expected to burden global oil demand.
Today’s focus turns to weak Chinese data and the political landscape in Italy.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.