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Energy Market Analysis – 15-07-2013 15th July, 2013  

Warm temperatures look set to continue but current supply issues are thought to be the biggest price influencer at present. A number of outages occurred in Germany and France which has led to a decrease in production and should prevent any losses to spot prices.

Improved BBL and Langeled flows resulted in a healthy UK system and led to NBP spot prices decreasing; August-13 fell by 0.47% and closed at 65.5ppt.

How did the energy markets close?

A long system helped by the warm weather led to prompt prices falling, Langeled and BBL flows also increased. Day-Ahead went down by 0.65ppt and closed at 64.75ppt while Far-Curve prices also made losses with Winter-13 closing at 72.5ppt, a loss of 0.25ppt.

Reduced coal-fired and nuclear availability saw Day-Ahead power add 0.7ppt to its price as gas-fired generation was required to meet demand. Front-Month decreased by £0.25/MWh as the contract followed a similar direction to its gas counterpart and APi2 coal prices fell due to concerns regarding economic growth in China.

How did the energy markets open?

Day-Ahead gas added 0.85ppt to its price to open at 65.6ppt as the system was short at the start of the session. The Front-Month contracts saw little movement but a LNG delivery is expected at South Hook tomorrow which should lead to contracts taking a bearish direction. Winter-13 went up by 0.3ppt with stronger Brent prices the influencing factor and storage levels are around 18% lower than they were this time last year.

Day-Ahead power dropped by £0.20/MWh as a consequence of multiple nuclear and coal-fired plants restarting after spending the weekend offline. Warm temperatures and improved wind generation have also led to the bearish trend currently displayed on the power curve. Front-Month also moved down but only marginally, losing £0.10/MWh on the back of lower gas, carbon allowances and APi2 coal prices.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity went down – closing at 68.35ppt and £51.80/MWh, respectively. This can be seen in the graph below.

energy market analysis 15th July 2013

Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.

Latest Brent Crude Oil prices

Brent 1st-nearby prices climbed to 109.1 on Friday and closed above their 200-day moving average which could lead to further gains. US gasoline prices went up 4.04$/b due to a number of refinery issues.

About The Author

Daniel Birkett

Daniel Birkett

Dan is responsible for updating our blog with the latest energy industry news and posting Daily energy market analysis. Connect with Dan on Google+ here.