There were large increases seen throughout the power curve last week as markets reacted to growing unease in the Middle East. Oil movements set the precedence for the week, rising to highest prices seen in over two years.
Gas and coal followed this upwards movement for most of the week, dipping slightly on Tuesday, to directly weigh on the power curves prices. Most influence was seen towards the back of the curve, however the front months also outturned gains.
Friday, 21 January 2011
The power curve showed mixed movement last week, finishing slightly down on the previous weeks close. With weather conditions being milder, and good generation levels seen, the system remained comfortable in meeting demand levels.
The underlying gas market saw its prices gradually rise through the week before dropping off on Friday, good LNG levels and less pressure on storage levels reducing risk premiums on the front months. There was support to the system last week with wind a significant contributor to the generation mix.
Monday, 15 November 2010
Gains were seen in both the Power and Gas markets on Friday, taking prices back up to levels seen a week ago. An increase in export demand late in the week and falling temperatures put pressure on the UK system, day ahead contracts rallying.
Spark spreads narrowed slightly, with the falling coal price having little effect on the rebounding Power curve.
Wednesday, 01 September 2010
Both the power and gas markets were dominated by the planned Norwegian gas field outages last week.
The early part of the week saw the market being relatively restrained as no-one seemed to know exactly how the outages would effect prices.
Rather surprisingly, when the outages did come gas supply actually increased, causing both markets to shed value. The other driver of the market this week appears to be carbon, which climbed steadily throughout the week. Due to the gas supply issue carbon was a relatively weak influence on the power curve at the start of the week but did help to push up spark spreads.
Tuesday, 20 July 2010
Bearish sentiment took hold of the markets last week with the entire energy complex shedding value. In the early part of the week power was strongly influenced by weak coal and carbon prices while gas was slightly buoyed by supply concerns.
As the week went on the gas once again took the lead on prices and suffered heavy losses across all contracts. Sparks contracted in the early part of the week due to coal and carbon influences on power but once the gas took over the pressure on the sparks eased somewhat. Tuesday, 22 June 2010
The volatility in the power market continued last week with strong European demand and uncertainty around the summer outages on gas remaining strong drivers in the power. The start of the week saw strong gains with the Winter10 contract trading as high as £51/MWh.
As the week went on the market seemed rather nervous at the levels of gains and became wide and rather thin, which helped the market drift lower. However much of the value gained in the early part of the week was retained. Over the week the spark spreads saw significant losses as the downward movement in coal put pressure on the power.
Monday, 07 June 2010
Last week was in general very quiet with poor liquidity in the power being a key theme. The only real movement in the early part of the week was in the sparks with the liquidity issues leading to movements in gas being more pronounced than in the power. This was particularly apparent during Wednesday's session where the spark lost nearly £0.80. Friday was the only day of the week that saw significant movement with much of the curve gaining £1.50 - £2.00 due to issues over Norwegian gas supplies and a price spike in Europe pulling up UK power and gas.
Thursday, 06 May 2010
Last week was one of the most volatile periods that the market has seen for a long time. The week started with gains of up to £2 per day on some power contracts, with the main drivers for these gains being gas. Gas exports to Europe were higher than expected and this coupled with high storage injections lead to higher prices.
This was the trend for the early part of the week, but by Thursday the downgrading of Greece and Spain lead to bearishness in the wider economy that translated into the energy markets, with prices being restrained slightly.
Thursday, 29 April 2010
Once again the gas market was driving the power market, with additional buying supporting the power prices. Both gas and power markets were able to gain momentum despite a lack of support from crude oil demonstrating the strong relationship between the two markets.
A bullish sentiment surged down the power curve yesterday, the drivers being gas, coal and carbon markets. The summer seasons in particular showed comparatively large base price gains of £0.75 to £0.85. Spark spreads remained steady overall, though, additional support from carbon widening the spread for the front month.
Wednesday's market continued to rally with continuing support from both coal and crude oil, however, once again the underlying driving force was the gas. The largest gain was seen in Winter 10 which grew by £1.10. Power was able to closely follow gas's market movement which kept spark spreads steady. Looking ahead temperatures are forecast to rise above the seasonal average going into the weekend.
Another volatile day for power and gas markets which saw some value eroded from both prompt prices and the forwards curve. At the prompt this was largely driven by the fundamentals of both a well supplied system and warmer than expected temperatures. Along the curve, direction was provided by the gas markets all day with the downward movement only halted by US gas towards the end of trading.
Though the UK power market opened weaker on Friday, a general market positive sentiment across the energy commodities raised the power curve throughout the day.
Thursday, 15 April 2010
The week opened to a comfortable gas system despite initial fears of a short April due to the expected fall in supply combined with unseasonal cold weather. In contrast to the market behaviour seen in the last two weeks Tuesday was a volatile and bullish session with gas and oil being the market movers. These sentiments were not to last and on Wednesday and Thursday only the front months could resist the downward market pressure. It was not until Friday that the market began to recover with crude oil driving the gas and power curves and reversing the previous sessions losses.
Monday, 22 March 2010
The week opened with continuing gas complications driving the market. Short gas supply caused flexibility issues in the short term. This meant that the whole market closed up across the curve.
Tuesday's market was volatile, in the morning concerns surrounding the Norwegian gas supply drove prices up, however, by the afternoon the market had become increasingly bearish due to decreased demand and increased gas supply arriving from LNG ships. This resulted in April closing below 30p/th down over the 2p/th from the high. By the middle of the week the gas system was able to balance itself without storage which had not occurred since late last year.
Bearish sentiments continued into Friday with a mixture of low liquidity and comfortable supply which subdued the market. By the afternoon the US gas helped recover the previous sessions losses.
Thursday, 18 February 2010
Both power and gas curve drifted downwards in what was a relatively quiet week in both markets.
The cold weather that has caused some nervousness in the markets over recent weeks appears to have subsided as both the gas and power systems coped well throughout the week, depite some gas field issues mid-week.
The one area of the market where there was movement last week was in the spark spreads, with power becoming more heavily influenced by coal and thus not responding fully to the downward movement in gas prices.
Bearish Brent oil due to a strong build in Weekly EIA crude stockpiles together with a bullish US dollar due to the fallout from the Greek economy woes sent oil lower, forcing the gas curve to weaken. Equity markets across Europe also fell which meant that power curve contracts across the continent eased which forced a retreat in carbon contracts. The bearishness in gas and carbon together with the poor prognosis from European economic recovery meant that power seasonal contracts softened as a result.
Wednesday, 20 January 2010
Monday - Prices fall across the power curves and on the gas seasons encouraged by warmer weather forecasts and softer underlying fuels.
Tuesday - Prices fall across the gas and power curves on warmer weather forecasts and weaker underlying fuel.
Wednesday - There has been a bearish sentiment in the energy market as prices fell across the power and gas curves dragged by weakness in the fuel complex, milder weather and comfortable power and gas systems.
Thursday - There has been a mix sentiment in the energy market as strong coal and carbon prices supported power curves while weakness in oil and US Henry Hub dragged the gas curve southwards.
Friday - Power and gas prompt contracts and near curve contracts weaken as weather conditions improve. Far curve power contracts move lower on the back of weakness in the near curve, whilst gas seasons remain flat.
The week opened with further complications surrounding gas which led to a bullish momentum in the morning although this did not last. By the middle of the week the Norwegian gas flow's issues had been resolved which combined with the warmer weather forecasted seem to push prices down on both the gas and power markets. A bearish sentiment then continued for the rest of the week with only US gas and carbon movement affecting the power and gas curve. By Friday the market opened down but proceeded to drift upwards over the rest of the day while spark spreads remained strong.
Tuesday, 05 January 2010
The final week of 2009 was predictably quiet with the only main change being a much colder forecast for the start of January. Tuesday saw the front month contract up a penny and a half and the Q1 strength lifted the gas curve while weaker carbon weighed on the sparks spread thus restraining the power's gains. The week ended with a bearish market and many contracts drifting down slightly during the day. Looking into 2010 the weather forecast is expected to remain very cold and demand is predicted to be stronger this week.
Tuesday, 22 December 2009
Prices last week were strong due to cold weather predicted right up until Christmas.
The week started with strong prompt power prices due to the loss of several power stations over the weekend. Higher oil, coal and spot gas supported seasonal contracts on Tuesday. Again fuel prices contributed to higher led seasonal prices on Wednesday, with carbon also having an impact.
Most seasonal gas and power contracts saw slight losses on Thursday led by falling oil and carbon prices. Losses in the power market were more significant. Carbon continues to be a key driver across the power seasons and the sell-off in carbon was cited as the main reason behind falling power prices.
Contracts on the far power curve suffered from the lack of trading interest due to the wide bid/offer spreads but gains across the entire fuel commodities meant that prices ended on Friday higher. During the morning, only the Summer-10 contract attracted any interest but only until later in the day did other seasons deal with prices closing around £0.3/MWh higher across the board by the close. The gas seasons rose on the back of bullish oil and gains in the US natural gas market, which resulted in around 0.7p/th being added to Summer-10 and Winter-10 gas contracts.
It remains unclear if the colder weather predicted to continue will be enough to deter a bearish market. The effects of low demand due to recession and high amount of generation available may sway the recent gains seen.
Wednesday, 09 December 2009
The week opened to a weak market as the recent cold weather was to be only temporary and soon replaced with warmer weather. The warm weather was predicted to stay until the middle of December with similar temperatures seen in Europe.
Warmer weather combined with the ample supply of generation available has resulted in the market remaining quite bearish for the majority of the week. The only commodity to see much growth was oil which rallied at $79 by the middle of the week.
The front month in particular was low for the year while the spark spreads widened for the forth consecutive session on Thursday.
Overall small supply shocks have resulted in the odd peak during the week but it remains to be seen just when the bearish sentiments will withdraw from the market.
Friday, 20 November 2009
Markets opened in bearish mood on Monday, above seasonal normal temperatures being a contributing factor. Reports of more LNG deliveries expected throughout the week helped the bearish sentiment.
Prices on Tuesday again opened lower although by the afternoon prices took a turn following the open of the U.S market. Rising oil and natural gas prices pushed he UK markets higher, with prices closing marginally higher.
Wednesday saw prices weaken again due to warmer weather and lower demand. Spot and forward contracts traded lower. Oil also fell on the back of a stronger US Dollar. Falling oil and warmer weather continued again on Thursday contributing to lower pries.
Friday saw a typically quiet trading day, although by the afternoon the market recovered due to gains seen in the US, this also led to several LNG cargos being diverted that were initially headed for the U.K. Oil again was bearish due to falling equity markets and stronger dollar. The price of oil closed at $78.45/bbl.