Energy Market Analysis – 23-05-2013 23rd May, 2013 Daniel Birkett
Spot prices saw little change today with German wind generation remaining at high levels and temperatures forecast to improve over the weekend.
How did the energy markets close?
The gas curve saw a number of contracts make gains with Day-Ahead rising by 0.55ppt and Front-Month going up 0.50ppt. BBL Pipeline flows did not improve a great deal after opening the session at zero, although Linepack remained long throughout the day. Temperatures are currently below average for the season and maintenance at a number of sites supported the bullish Front-Month contract.
Day-Ahead power also made significant gains rising by £2/MWh as it followed the trend set by its gas counterpart. Seasonal contracts also closed at a premium with Winter-13 going up by £0.25/MWh. Thursday’s session would also see a number of power plants undergo maintenance which will include a 500Mw coal fired plant.
How did the energy markets open?
Front-Month opened relatively unchanged and there was not much movement on quarterly contracts either as the near curve ignored gains made by prompt contracts. Although prompt contracts went up, the gains were limited by increased storage withdrawals. Langeled saw reduced flows of 7mcm but despite this Linepack opened 10mcm long.
Day-Ahead made a slight loss after healthy gains in the previous session, opening £0.45/MWh down. Wind generation held almost 10% of the generation mix as it opened the day 23GWh higher and interconnector flows in the Netherlands saw a decrease of 5GW.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity made gains – both closing at 68.35ppt and £52.18/MWh, respectively. This can be seen in the graph below.
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 made a significant drop yesterday falling by 1.31$/b and losses are thought to continue throughout today’s session. The recent EIA report displayed a bearish outlook with low final demand and healthy stocks.