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Energy Market Analysis – 29-01-2013 29th January, 2013  

Weak demand resulted in a comfortable UK gas system yesterday, which was shown through the drop in storage withdrawals. A clear drop in prices, however, was avoided through the news that the outage on the Troll A platform would continue.

UK fundamentals should remain steady today, with NTS demand up slightly compared to yesterday – which leads us to believe February 2013 will remain stable.

A notable increase in wind outputs from Germany, coupled with wilder weather, pushed NWE power spot prices down yesterday – we even witnessed hourly prices below €10/MWh on the German market.

Power prices have the potential to stay low for the rest of the week.

How did the energy markets close?

We saw prompt and Day-Ahead gas prices make slight gains yesterday, despite the forecasted milder weather and the news of the extension to the unexpected outage at Norway’s Troll gas field.

Day-Ahead power opened up yesterday’s trading at a monthly low of £44.60/MWh, which was down to increased forecasted wind output and warmer weather. Far curve prices decoupled from a ‘bullish’ has market to remain sluggish.

How did the energy markets open?

On the back of falling demand (forced by milder weather and a well-supplied system), NBP gas prices opened bearishly this morning. Far curve prices weren’t affected by the rise in Front-Month Brent, which was up to $113.40/bbl on an expected increase in US demand.

A new monthly low of £43.50/MWh was seen for Day-Ahead baseload power this morning, which we can attribute to higher wind speeds and milder forecasted weather.

1-year forward prices

A slight increase was registered for both 1-year forward gas and power prices. You can see this rise in the graph below.

Latest Brent Crude Oil prices

A slight rise in Brent 1st nearby was seen yesterday – with supports now standing at $113, $112.4 then $111.5/bbl. This afternoon, our focus will be on US economic data (on home prices and consumer confidence), which could lead to a downturn in mood. This evening, the API report could provide further influence.

Energy prices

Energy Market Analysis 29-01-2013

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

About The Author

Nick Boyle

Nick Boyle

Nick is responsible for marketing for Apollo Energy. He also manages and moderates the blog. Connect with Nick on Google+ here.