Energy Market Analysis – 15-03-2013 15th March, 2013 James Turner
We saw weaker demand for gas yesterday. This, combined with a comfortable pipeline supply, helped to push European spot and near curve gas prices down.
It is expected that European gas demand should drop further today. UK’s NTS demand is also likely to be lower than yesterday’s level. What’s more, temperatures are set to climb next week; which should lead to further drops in UK demand.
Milder temperatures helped to ease pressure on power demand, leading to lower overall spot power prices. Mixed sentiment was seen on the far curve, as prices failed to take clear direction.
How did the energy markets close?
Day ahead gas tried to regain some of its losses after falling over 9ppt on Thursday morning; closing at 77.30ppt. This can be attributed to further scheduled maintenance of the Norwegian Troll platform.
Power’s day ahead followed its gas counterpart yesterday – a move that could be down to a well- balanced gas system as well as lower heating demand. Day ahead ended the day at £56.75/MWh.
How did the energy markets open?
An update of temperatures, coupled with a more comfortable system, resulted in and overnight loss of 5.05ppt for day ahead gas. In spite of low storage stocks, April-13 prices dropped from their record high.
Power’s day ahead followed its gas counterpart again this morning; opening at £53.85/MWh.
1-year forward prices
A further drop has been recorded in the one year forward prices of business gas and business electricity. This drop is represented in the graph below.
Latest Brent Crude Oil prices
A recovery in Brent prices was recorded following the expiration of the Apr13 contract.
A fall in US unemployment helped to fuel a rebound in risk appetite. Meanwhile, the market awaits further US economic data as well as news from the Italian parliament.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.