Energy Market Report – Electricity

  • Market Comments January

    Thursday 2nd January 2020 - Weak CO2 prices, low demand, warm temperatures and good wind conditions send the power prices tumbling in both Germany and the UK. In the Nordics prices collapse after a very wet weather forecast has dramatically increased the hydro storage levels. We do not expect to see higher prices until the weather conditions turn colder and less windy. This morning we witness a weak start into the day. CO2 drops another 0.2 EUR/t and pressures the prompt of the German and UK curve. Nordics are down another 1-2 EUR/MWh on persistent wet conditions and warm temperatures.

    Friday 3rd January 2019 - Bearish weather and a decrease in carbon sent down power contracts across the board in yesterdays European power market session. Both wind and temperatures look to stay above average for the remaining of January, giving a bearish push to power contracts. Carbon continued the bearish trend it had over the Christmas period. All in all, mostly bearish inputs to power contracts.Today power markets open up. The UK killing of an Iranian general have raised oil by bore than 2 $/bbl, generally raising geopolitical risks.

    Monday 6th January 2020 - Power prices rose in Europe on Friday with feedstocks, gas, coal and carbon which were in turn driven higher by a rally in oil prices due to Us military action in the Middle East against Iran and the killing of an Iranian General in the Revolutionary Guard. Power in the UK rose most aggressively, followed by Germany while the Nordics were less driven as hydro levels have been increasing over the holiday season. This morning, feedstock prices, gas and coal, are up along with modestly increased prices for carbon. Oil continues to gain, up $1/bbl providing some support to commodity prices, but mild weather and brimming stock levels will make it hard for this to become a rally.

    Tuesday 7th January 2020 - Power prices made gains on the spot from the lows of the weekend, while forward curve pricing rallied and then fell with gas and carbon prices as the market was taken on a rollercoaster ride throughout the day. Weakness in feedstocks continues at the start of today's trade action, coal and gas are dealing lower along with some softness in carbon credit pricing. Oil is dealing slightly lower as oil majors and drillers have forward sold (hedged) their production to take advantage of the spike in prices. robust wind production coupled with rising hydro levels are also weighing on power prices across North West Europe. Weather forecasts show no distinct cooling trend, remaining above normal for the 15-day outlook.

    Wednesday 8th January 2020 - UK power prices tumbled yesterday, falling with NBP gas prices and robust wind power output, despite gains in carbon prices. German and Nordic power also fell on mild temperatures robust wind and hydro levels, despite gains in coal and carbon pricing. This morning, German and UK power are flat along with gas and coal prices, oil is up as is carbon, renewables remain strong limiting upside thus far, Nordic prices are slightly down on the hydro and wind power production levels. Geopolitical risk have been heightened with missile attacks from Iran on US bases in Iraq, however the supply situation of commodities to Europe should remain unaffected.

    Thursday 9th January 2020 - Power prices found support and some gains in the spot yesterday, as production from wind dropped off, however spot prices remain weak and below those for the balance of winter. Curve prices came under pressure in the UK from the drop in carbon prices but the stability of gas prices kept the losses to a minimum. In Germany and the Nordics curve prices moves were mixed with front end weakness and support for the Calendar product. This morning, prices are mostly flat with only minor changes plus or minus the closing prices, gas and coal are down while oil and carbon are up making for indecision in the market psychology.

    Friday 10th January 2020 - Power prices softened in the spot, both in the UK and Germany, while all other contracts across the European power complex rose with gas, coal and carbon. This morning, the market continues to find support from gains in the feedstocks, coal and gas, coupled with renewed buying interest in carbon contracts. Weather forecasts are showing some outlying possibilities for a dip into below normal temperatures near the end of the 15-day outlooks and wind power output is expected to trend lower after spiking into the weekend and next week. buying interest remains contained as the oversupply in commodities and mild weather keep a weight on prices.

    Monday 13th January 2020 - UK power prices slipped on Friday, falling with gas and weaker CO2 prices, much the same for Germany which tracked the lower pricing in gas and carbon as well, finally the Nordics gained on slightly drier and less windy conditions. This morning, feedstock prices are up, gas and coal, while oil and carbon are more or less sideways to only marginally higher. Power prices are mixed with gain in the UK on gas while German power is up on the calendar contract and flat to down on the more prompt contracts, Nordic prices are remain soft on bearish weather related inputs.

    Tuesday 14th January 2020 - Power prices were weak yesterday in spot markets across Europe and the UK, as wind output sank prices, curve contracts were more mixed with both German and UK forward contracts seeing some gains on the back of coal and gas, while in the Nordics the hydro balance continued to pressure that market. This morning, power prices are coming under pressure from a fall in carbon prices and milder forecasts, coal and gas are also dealing lower piling on additional pressure to power prices. Carbon is challenging a technical resistance and if it breaks more downside could be expected, bearishness remain the driving sentiment in these markets

    Wednesday 15th January 2020 - Power prices found some support for spot prices yesterday, as the peak in wind and warm temperatures across NW Europe and the UK begins to ebb. By contrast, curve prices took a thrashing in all markets along with the feedstocks, gas and coal. This morning, the feedstocks are down slightly, while German power has found a bit of support from gains in carbon, thus far UK and Nordic power are trading flat day on day. Weather forecasts have moderated; however, peak wind output and warm temperatures are today with both to fall towards normal later into this week, traders will be watching closely to realign their positions if we should see a further turn in temperatures, warmer or colder.

    Thursday 16th January 2020 - Power prices rounded out yesterday's trading session with gains on the spot as wind power output began to ebb, while curve trade made no directional changes on the back of softer feedstocks and gains in carbon contracts. This morning, weather forecasts have gone a bit warmer, carbon and col are trading higher while coal and gas are sideways. German and Nordic power made some early gains on the open which have been moderated slightly while UK power is mostly flat along with NBP gas. The German government is expected to announce further details of its buyout program for German utilities to close coal-fired power plants, the closures could provide some longer-term support to the gas markets as renewables alone are not expected to cover all the lost production.

    Friday 17th January 2020 - Power prices dove yesterday, falling in line with feedstocks, gas and coal, despite gains in carbon contracts. Mild weather and warmer forecasts also proved to be bearish, even in the face of falling wind power production. This morning, feedstocks are mostly flat to slightly lower along with carbon contracts, thus power is also dealing lower across all markets. Weather remains the driving factor for power prices and mild conditions across Europe and the UK are keeping traders bearish, in the Nordics an ever growing hydro reserve is keeping prices down with the potential to kill any rise in prices with the opening of the proverbial 'flood gates'.

    Monday 20th January 2020 - Power prices in the UK flowed gas and coal to the downside on Friday, save for spot prices which gained modestly from an easing of wind output. German prices rose with carbon on Friday, while the Nordics sank under pressure from growing volumes of water in hydro reservoirs weighing on power prices. Weather forecasts have warmer weather set to arrive int he second half of the 15-day outlook for NW Europe and the UK, coupled with an influx of strong windy conditions which should pressure spot prices. Gas is down today while oil and coal are up, carbon is sideways, the weak gas and mild windy weather is weighing on power prices which are down from the previous day's close.

    Tuesday 21st January 2020 - Power prices were sent lower across all contracts and markets yesterday, save for spot UK power which managed a modest gain, weakness in feedstocks (gas and coal), coupled with lower prices for carbon and mild, wet and soon to be windy conditions sank contracts. This morning, the market is taking a breather from the sell off as traders consolidate positions and firms look to lock in hedges or abandon unprofitable positions. Price action is sideways for gas, coal and carbon which is keeping all but the Nordic traders from further selling, oil and equities weakness coupled with mild weather provide the overarching sentiment for bearish sentiment as this session gets underway.

    Wednesday 22nd January 2020 - Power prices rose in the UK yesterday, following the gains in gas and carbon, while Germany was mostly unchanged, and the Nordics fell on ever expanding hydro reservoirs. This morning, weather forecasts have been revised even warmer with expectations for a sharp rise in wind output to hit max productive capacity in both the UK and in Germany, the combination of mild weather and high wind output will crush spot prices on these days as the system will likely become very long power. Power is trading sideways in early action caught between slightly softer gas and coal prices and increased costs for carbon credits.

    Thursday 23rd January 2020 – UK power prices came under pressure yesterday from falling NBP gas and a stronger pound, by contrast German power gained despite weaker gas and coal prices even with an almost unchanged price for carbon. Nordic power sank on wetter conditions and a further build in stored water in Scandinavian reservoirs. This morning, the feedstocks are trade tight to yesterday's close, carbon is flat, and oil is down. Power prices are up slightly in Germany and even more so in the Nordics which look a touch drier today than yesterday. Finally, UK power is unchanged this morning as major inputs, gas and carbon are flat day on day. The big increase in wind output that should hit on Sunday could bring further selling pressure to power.

    Friday 24th January 2020 - Power prices in the UK dropped with weaker carbon and gas prices yesterday, while German power was mixed but mostly down and Nordic power was mixed but mostly up. This morning gains in gas and oil are paired with losses in coal and carbon. Power prices are mixed with minor gain in German and UK power while Nordic power is down further. Weather forecasts continue to roll warm, wet and windy while average seasonal norms are on the upswing as the peak of winter weather is passing. Short covering and profit taking appears to be taking in early trade action as the week comes to a close.

    Monday 27th January 2020 - Power prices in the UK gains on Friday, following minor increases in the price of gas at the NBP, despite the lower costs for carbon credits. German power was mostly flat while Nordic power prices tumbled, driven down by wet and windy weather. This morning, power prices are only modestly changed in Germany and the UK, plus or minus, with little discernible direction yet to take hold. By contrast, the Nordics are clearly up, driven by a fall in expected precipitation in the first week of February. Oil weakness continues, driven by concerns over travel restrictions associated with the coronavirus outbreak. Coal prices are down which will pressure German power, while gas is sideways, and carbon is flat to slightly lower, focus remains on the weather as traders look for signs of wintery conditions.

    Tuesday 28th January 2020 - Power prices were broadly unchanged in the UK, as NBP gas closed out the day with a, more or less, sideways move, much the same for German power while in the Nordics, clear gains were made. The advent of mild windy weather is expected to pressure spot prices across the region, while traders continue to look for signs of winter weather in the polar vortex and consult their meteorologists. Bearish stock markets and weakness in the global commodity complex remain a focal point this morning as European traders try to separate this bearish sentiment from local conditions. Power is trading sideways in both Germany and the UK in early trade action while the Nordics are firmly lower on weather driven concerns

    Wednesday 29th January 2020 - Power prices rallied in the UK and Germany yesterday, following the rise in coal and gas prices, by contrast, Nordic prices fell as demand dropped and wind output rose. This morning, power prices are coming under pressure from softening coal and gas prices and lower costs for carbon credits. Stock markets have regained their footing after a scare from the coronavirus concerns in China and the possible hit to consumer and commodity demand. European markets are in positive territory for the start of the day along with oil, expectation of a storage draw in the US have halted that slide while gas and power trade lower in Europe.

    Thursday 30th January 2020 Power prices fell out of bed yesterday and hit the floor...hard, the combination of warm and windy conditions injured the spot while a sell-off in feedstocks, coal and gas, finished the curve off. This morning, weather forecast revisions have increased temperatures at the back end of the 15-day outlooks dashing hopes for the bulls for any winter weather conditions. Stock markets are down across Asia and Europe in early trading as the scare of the coronavirus continues to effect markets, expect more bearishness and margin calls on Monday when markets in China reopen after the Lunar New Year holiday. All power markets are trading lower with acute spot price weakness as wind output hits near technical maximum in NW European regions like the UK, German and the Nordics.

    Friday 31st January 2020 - Power prices fell with feedstocks yesterday on the curve as coal and gas were dealt lower on mild weather, while spot prices suffered under spring time conditions and near capacity wind output. Overnight weather forecasts have been revised warmer and with more wind in the backend of the 15-day outlook pressure on prices looks set to continue. This morning, both the spot and curve have suffered another body blow, the one-two combo of lower feedstocks, coal and gas, and lower carbon prices has toppled power prices, sending the bulls running for cover. Commodity weakness is being compounded by equity weakness in the face of the coronavirus outbreak, lowered demand in China's industrial heartland has spooked investors as raw materials and finished goods both decline.

  • Market Comments February

    Monday 3rd February 2020 - UK power prices slid on Friday, from spot across the forward curve, as windy warm weather sapped demand and boosted output, German and Nordic power were also softer but retained some areas of support, stable coal and a minor uptick in carbon helped to provide stability. This morning, the European markets are waking up to turmoil and carnage in Asia, Chinese markets have been hit in trading, down 8% taking many commodities like copper and iron ore down with them. Spill over into the European and American equity markets is expected to continue throughout the day. In early trade action markets are down, compounding the weakness is selling in feedstocks and carbon

    Tuesday 4th February 2020 - Power prices found there footing in the spot markets across NW Europe and the UK as renewables eased back lifting prices, curve contracts fell with feedstocks. This morning, the market has found some support on the back of gains in oil, coal and carbon while gas is down slightly, German and Nordic power are both up slightly while UK power is sideways in early trade action. Weather forecasts have been revised warmer and windier which will keep the upside on power limited. Global stocks have also found a floor and today are up in both Asia and Europe, after gains yesterday in the Americas

    Wednesday 5th February 2020 - Today power prices have retreated with a minor drop in gas and coal, while carbon firmly lower. In the Nordics precipitation is picking up again, which will deliver even more water to already well supplied reservoirs, keeping upward pressure on prices low.

    Thursday 6th February 2020 - UK power prices were dealt lower yesterday on slightly softer gas prices and mild weather, longer dated contract rose with their gas compatriots, stronger coal, oil and carbon assisted the lift. German power was resoundingly down despite gains for both coal and carbon, while the Nordics moved higher on feedstocks. This morning, oil is up, coal is down, and gas and carbon are sideways. As a result, and factoring the warmer and windier weather, power prices are slightly down, driven by spot weakness. CNOOC, the Chinese state oil company has called force majeure on some of its LNG contracts in what could be a worrying sign for global commodities like coal, iron ore and copper.

    Friday 7th February 2020 - Power prices were led lower yesterday by spot prices in the UK, soft gas and carbon prices kept the curve in the red. In the Nordics and Germany power prices also fell with coal and carbon, however the Nordics took a particular beating on the back of swelling hydro reserves and increasing wind power output. Over the weekend spot prices for power could dip into negative territory in Germany pressuring spot prices across NW Europe as wind output hits maximum capacity of 50,000 MW. This morning power prices are unchanged, save for spot prices which are dealing lower, Germany is already trading 12 Euro for Sunday, thus far curve trading is muted and sideways

    Monday 10th February 2020 -Power prices were dealt lower in the UK on Friday, due to generally bearish inputs, lower coal and carbon with weaker spot and balance of winter gas. Moves in Europe were more mixed despite the same bearish inputs, in fact, in the Nordics prices went up! Germany was mixed and mostly flat. This morning, prices for power are decidedly down on the back of a drop in the price to pollute, carbon, coupled with falling coal and softer gas prices. Mild temperatures and wet windy conditions are expected for the 15-day outlook which will continue to pressure spot power prices as robust renewable production continues

    Tuesday 11th February 2020 - Power prices floundered in the UK and on the continent yesterday from March forward to the seasonal and calendar contracts, falling gas, coal and carbon pressured prices while bearish oil and broader commodity complex fed sentiment. Spot prices managed to make gains from the weekend, albeit the increases were moderate, and the absolute prices levels remained low. Mild wind conditions are expected for the balance of the month leaving very little time left for winter to arrive. This morning, power prices are generally unchanged from yesterday's close of business levels. Feedstock prices are mostly flat after taking a thrashing, oil has rebounded from its lows, despite a growing glut of crude and products, and stock markets are in positive territory.

    Wednesday 12th February 2020 - Power feedstocks are mixed with gas dealing flat to slightly up while coal is down, and carbon is unchanged. Oil is also up in early trade action, however the APIs forecast a build in US stocks from last week due to slower exports, if the EIA confirms the build of 6 million barrels there may be some renewed pressure. Power prices are up in both Germany and the UK in early action while the Nordics are flat, save for the front month which is down.

    Thursday 13th February 2020 - Power prices in the UK were boosted by gas, coal and carbon along with bullish sentiment from oil, the results and drivers were much the same in Germany while the Nordic market was more mixed with high winds keeping pressure on the front month and quarter. This morning, weather remains mild and windy in all of NW Europe while precipitation is increasing in the Nordics. Coal and oil are down while gas is mostly flat to slightly lower along with the prints on carbon. Power is down slightly as some traders return from E-world and begin to trade again. A general bearish tone is covering all equity and commodity markets as new counts for coronavirus infections increased with a more accurate testing method

    Friday 14th February 2020 - Power prices lost ground yesterday in spot markets around Europe and in the UK, while curve contracts made minor gains on the back of feedstock, coal and gas, in addition to the lift carbon contracts. This morning, forecasts remain mostly unchanged save for slightly cooler temperatures at the back end of the 15-day outlook, wind power production remains robust and LNG arrivals are expected to pick up with slowing demand in China associated to the coronavirus. German and UK power are mostly flat day on day while Nordic power is down more pronounced on increased precipitation in the 15-day outlook. UK power is off on the spot with robust wind production while the curve is mostly flat waiting for the gas market to give a clearer sense of direction

    Monday 17th February 2020 - Power markets in the UK ended Friday with a plus together with a rally in fuels and emissions. The Nordic power market continues to struggle with the warm temperatures and heavy precipitation and traded sideways on Friday. During the weekend storm "Dennis" brought record winds supply to north west Europe therefore the average base and peak spot prices came in at -8.27 £/MWh which cleared on negative prices. The outlook for the coming days remains mild and very windy.

    Tuesday 18th February 2020 - Power prices in the UK were dragged up with gas yesterday, while German and Nordic prices were mostly flat or down. The move in feedstocks, gas particularly, was more of a short squeeze or technical correction as no fundamental changes took place. This morning, gas is trading around flat to the previous close with coal and oil slightly down, carbon is unchanged. Weather forecasts remain at or above normal for the balance of February and into early March with strong wind output expected for the same period. UK power is up slightly in early trading along with German and Nordic power as traders assess the bounce in gas and the fundamental situation.

    Wednesday 19th February 2020 - Power prices in the UK went for a wild ride yesterday following the highs and lows of NBP gas, German power shrugged off the collapse in coal and held to flat with carbon and support for the spot market, wet and windy weather continued to leave the Nordic power market soaked. This morning, weather forecasts have been revised slightly warmer for the 5-day outlook while the back of the 15-day outlook remains cooler, with a prognosis of about 1 degree above the seasonal normal. Coal, oil and carbon are all up slightly in early trade action, along with gas, this is providing support to both spot and curve power prices across NW Europe, save for the Nordics which are all wet

    Thursday 20th February 2020 - Power prices diverged yesterday between the UK and the continent, despite a rise in gas and carbon, only the UK moved higher, weak spot prices in both Germany and the Nordics kept pressure on forward prices as well. This morning, feedstock prices are mostly unchanged with oil, coal and gas all flat while carbon is slightly lower. Weather forecasts are showing a drop in temperatures for next week with the possibility of a few days slightly below the seasonal normal. In early trade action German power is up slightly while Nordic contracts are offered lower. UK power is offered slightly higher than the previous close though no contracts have, as of yet, changed hands, traders are waiting for other markets to make the first move.

    Friday 21st February 2020 - UK power prices were little changed after yesterday's trading which saw only minimal losses to gas and carbon, mild weather and robust wind production kept pressure on the spot. Across the channel continental prices were mixed, despite retracement in both coal and gas, spot prices continued to be soft for the weekend. In the Nordics conditions remained very bearish as rising hydro balances and windy weather pressured prices. This morning, coal, oil and gas are dealing slightly lower, with spot prices leading the way for the gas, carbon contracts, German and UK power are both down slightly while the big change has been the Nordic market which is up on a change to slightly drier conditions.

    Monday 24th February 2020UK and German power prices fell on Friday along with gas and oil while the Nordics rallied on drier conditions. This morning, traders are seeing cooler temperatures in the forecasts with slightly less wind, albeit still higher than seasonal normal. Pressure on power prices is also continuing on the longer dated German and UK contracts as bearish news from the broader commodity complex and Asian equity indexes filters into trade action. The expansion of COVID-19 virus cases in South Korea and the arrival of increased cases to Italy has sunk equity markets and is brining fears of further economic contraction, oil is down 2% and may require support from OPEC+. The only strength in power is seen in the Nordics which are showing drier conditions and a further bounce in prices.

    Tuesday 25th February 2020 - Power prices in the UK sank along with gas and carbon yesterday, despite slightly cooler temperatures, a routing of German power and global commodity and equity markets put pressure to power prices, only the Nordics could ignore the world around them and gained on drier conditions, despite the gains for the Nordic contracts their outright value remains the lowest in Europe. This morning, there has been a bit of a bounce in global equity markets, with European markets opening in positive territory, coal and oil are both up modestly after yesterday's bloodbath. German and Nordic power contracts are all in the black today in early trade action while the UK flounders around flat to slightly down along with gas.

    Wednesday 26th February 2020 - UK power prices were sent lower yesterday with the input of lower cost feedstocks and discounted carbon prices, German power followed a similar pattern with a bit of support for the front end due to slightly lower renewable output, the Nordics continued to gain on drier conditions. This morning, weather forecasts have swung slightly warmer while wind power production is expected to peak this weekend before settling in lower for March. Power contracts are following feedstocks which have included lower prices for coal and oil with slightly softer gas and carbon, UK contracts are offered flat to slightly down from the close with buying interest subdued for the moment, German and Nordic prices are dealing lower.

    Thursday 27th February 2020 - UK power prices moved up yesterday along with NBP gas contracts, shrugging off the trend of continental markets in Germany and the Nordics which were dealt lower. This morning, the equity markets remain nervous and in a bearish mood which has traders shifting to gold, haven currencies and bonds while industrial commodities and stocks continue to be under pressure. Power prices in Germany are following on the drop in coal and carbon, dealing lower as are most contracts in the Nordics which are offered lower from the previous close. In the UK, power traders are looking to the gas markets for direction and are torn between spot strength and curve weakness, with contract expiry markets are likely to be volatile. Contracts are offered wide to the close indicating a lack of confidence, bearish broader markets may soon provide direction.

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