Energy Market Report – Electricity

  • Market Comments December

    Monday 3rd December 2018 - Last weeks downwards movement has completely reversed this morning with prices soaring back up on the back of geopolitical moves by OPEC, Russian, Qatar and Canada. OPEC and Russia have signalled that they will continue their co-operation pact which could lead to new cuts for 2019. Furthermore, the US-China tariff spat has eased with a truce for 90 days and a roll back on China's part of agricultural subsidies.

    Tuesday 4th December 2018 - Just like gas, electricity rose higher yesterday afternoon following gains made in oil. Today all commodities are retracing some of the gains from yesterday, forecast are a touch warmer and more wind is expected over the next couple of days which could further pressure spot prices.

    Wednesday 5th December 2018 - Power prices sank under the weight of warming temperatures and increasing wind output in the UK yesterday driving down spot prices while falling NBP prices weighed on the curve. The picture was more mixed on the continent and in the Nordics as the volatility in coal prices, swinging both positive and negative with oil and modest gains in carbon left the curves generally weaker with some sporadic gains. This morning, the market is looking soft after the tone in global markets soured yesterday with a 3% loss in the S&P500. Coal, gas and carbon are down with oil also taking losses which has put pressure on the power markets, all of which are down in early trading action.

    Thursday 6th December 2018 - Power prices fell yesterday, coming under pressure from carbon and milder forecasts. This morning, coal, gas carbon and oil are all being traded down putting further pressure on power prices around Europe from spot markets to longer dated contracts. Wind power output is set to pick up in Germany and the Nordics while gains have already been felt in the UK. This morning’s weather forecasts runs have come in a touch warmer than yesterday adding to the bearish tone.

    Friday 7th December 2018 - Power prices were dealt lower across the UK yesterday, coming under pressure from bearish global equity markets coupled with weakened oil and gas prices. This morning, gas and oil prices are again being dealt lower while coal and carbon are up slightly. In early trading UK power is down with gas while German power is mixed, lower for the balance of winter while longer dated contracts are up slightly, in the Nordics prices are up slightly in thin volume.

    Monday 10th December 2018 - Friday’s power prices closed modestly, following the gas market to the upside and receiving support from increases in coal, carbon and oil. This morning, prices are mixed, UK power is up marginally with gas, while German power is down with coal and the Nordic markets are mixed, lacking a clear direction in early action. Expect some defensive trading in the UK as the BREXIT vote takes place tomorrow.

    Tuesday 11th December 2018 - Power prices were on the rise yesterday, making increases on fundamental feedstocks like coal and gas coupled with increased pollution costs from a rally in EUAs. Gains in UK power out performed major continental markets owing to currency fluctuations, a weaker pound driven by a delay to the BREXIT vote in London. This Morning, power is trading around yesterday's close save for prompt and spot contracts which are dealing lower.

    Wednesday 12th December 2018 - Power prices increased yesterday. Even with the nearby drop in temperatures a return to above normal conditions is expected and with it an increase in wind is also forecasted, mild windy weather over the holiday period could put heavy pressure on prices as industry and business consumes less during this period. This morning, carbon prices are down slightly while feedstocks are little changed day on day. As a result, power contracts across Europe are trading in a tight range to yesterday’s close.

    Thursday 13th December 2018 - Power prices were distributed lower yesterday in spot markets across Europe and the EU, while curve prices galloped higher on a blow-out in carbon prices. This morning, power prices are up again, over a euro or pound across forward markets as carbon extends gains and colder weather sets in. Stock markets are up as well in early trading and the pound is making some gains as the news of May's confidence survival sets in.

    Friday 14th December 2018 - Power prices moved up and increasing demand as temperatures dip and carbon rallied. Increases in the UK power market followed, in size, the moves in the NBP gas market. This morning, coal and gas are up modestly, and carbon is also in positive territory which is boosting power prices across Europe. Weather forecasts are a touch warmer towards the end of the 15-day outlook so expect mild conditions during the holiday period.

    Monday 17th December 2018 - Power prices united on Friday, driven by strength in spot markets around Europe and the UK, supported by increases in the carbon market of over a euro, making the cost to produce and consume power more expensive. Forecasts continue to show mild weather and below normal renewables output for the balance of the year, however, traders remain fixated on longer dated atmospheric conditions which could signal colder weather into the new year.

    Tuesday 18th December 2018 - Power prices dropped in the UK yesterday as temperatures are rising with a moderate increase in wind power output. By contrast curve prices united on another strong day for the carbon market. As equities and commodities markets suffer losses around the world and economies contract, carbon continues to gain, at least for now. This morning, coal, gas and carbon prices are flat or slightly lower, weather forecasts continue to look mild out to the end of the 15-day period. Power is trading slightly lower in early trade action in all markets.

    Wednesday 19th December 2018 - Power prices fell in all markets and on all contracts, save for spot power in the UK which made some minor increases, although still trading at a sharp discount to the front month. The gains in power came from following the feedstocks, coal, gas and oil were all down with the large drop in oil casting a bearish pall over the commodity complex. This morning, power prices are up with carbon while coal, gas and oil are trading around flat to the previous close in early trade action.

    Thursday 20th December 2018 - Power prices united across the board and across all markets yesterday as prices were once again beholden to the EUA market. This morning, carbon coal and oil are all down or trading flat to yesterdays close, gas is also flat but may get a bit of support from a short UK system which will entice storage operators to send out volumes.

    Friday 21st December 2018 - Power prices were dealt lower yesterday, despite increases in carbon and gas, as the euro gained, and oil and coal fell. This morning, weather forecasts remain broadly unchanged, oil remains under pressure and European markets are expected to be soft on the open. What few contracts that have traded are being exchanged around level near yesterday's close.

    Monday 24th December 2018 - Power contracts were on the rise on Friday as updated weather forecasts showed colder and less windy weather. This morning weather forecasts looks mostly mild for the rest of the year and while uncertainty rises for the new year, the input from the weather is likely to be bearish today. Carbon is trading above 25 €/ton and could drive the power curve higher. Today is only ½ a day of trading, so expect little action volume wise.

    Thursday 27th December 2018 - UK power dropped marginally on the 24th December with gas being the bearish input while carbon continued the bull run to close above 25 €/ton for the 2nd time this year (first time being on the 10th September). This morning forecasts looks warmer again, especially for the rest of this year, and power markets are coming off together with gas. Coal is also dealing lower with Cal-19 trading at 86.50 $/ton, down another ½ $/ton since last close.

    Friday 28th December 2018 - Warm weather and lower coal and gas sent down most power contracts. Only carbon was a bullish input as it had a significant rise on Monday that wasn’t priced in. But it failed to counter the other bearish inputs. Today is the last day of trading for Continental power markets so expect little volume to go through. Markets are very slow to open this morning, but looks to be up a bit by now.

    Monday 31st December 2018 - A warm end to 2018 sent down power prices on Friday. Gas was also weak, and we only saw a slight lift in coal. For power markets, only UK is open today and only for ½ day so expect volumes to be low. Except for a few days around the 3rd of Jan, we mostly see mild weather for the next 7-10 days. Into the 2nd week of Jan things becomes a bit more uncertain, but for now average weather is forecasted.

  • Market Comments January

    Wednesday 2nd January 2019 - UK power prices shadowed gas down on the 31st of Dec, while Continental power markets had their last day of trading on the 28th of Dec. Carbon had a strong run before Christmas but was unchanged during Christmas days. This morning Carbon is up and is close to testing previous highs. Gas is also up in the front, while oil and coal have opened the year on the bearish side as Chinese PM’s came out below expectations. Power is up across most contracts and countries.

    Thursday 3rd January 2019 - UK power shadowed gas and Carbon up yesterday, while Continental power took a bearish input from low spot prices and weaker coal. This morning markets have opened on the bearish side. Forecasts are warmer and coal, gas Carbon and oil are all down from yesterdays close.

    Friday 4th January 2019 - UK power shadowed gas and Carbon up yesterday, while Continental power took a bearish input from low spot prices and weaker coal. This morning markets have opened on the bearish side. Forecasts are warmer and coal, gas Carbon and oil are all down from yesterdays close.

    Monday 7th January 2019 - Weather models were pointing towards a Sudden Stratospheric Warming event, a weather spectacle that led to the Beast from the East in March 2018, hitting towards the end of January which was ensuring that front month contracts were holding on to some risk, but this morning this seems to have disappeared with the chances of this reduced massively in the UK. Temperatures are set to remain at season al norm as minimum until the end of January.

    Tuesday 8th January 2019 - Power prices took input from a surrounding bearish energy complex yesterday and corrected down. The price result of the daily European emissions auction disappointed and the emissions curve were immediately pushed significantly lower. It should be noted that after a substantial downward correction oil prices have now stopped falling and this is likely to support gas prices and therefore also power prices further out on the curve.

    Wednesday 9th January 2019 - Power prices moved up yesterday, touching higher with feedstocks like natural gas, coal and carbon credits. This morning, gas, oil and carbon prices are ticking slightly higher providing support to power, despite this, fundamentals are neutral to bearish as gas markets remain over supplied and weather is expected to remain above normal for the 15-day forecast. In addition, a boost from renewable energy, wind, and robust gas stocks could provide headwinds to higher prices.

    Thursday 10th January 2019 - Power prices rebounded in the spot markets across Europe and the UK as temperatures recovered from below normal, while curve prices fell alongside feedstocks, gas and carbon. This morning, gas and power prices are trading around flat to the previous close. Oil has pulled back slightly after moving higher over the past eight sessions, while carbon and coal look mostly neutral. Weather forecasts show another cool down coming near the end of the 15-day forecast.

    Friday 11th January 2019 - Power prices dropped yesterday as mild weather and improving wind output lowers demand and increases supplies. Longer dated contracts were mixed with minor increases or losses as conflicting signals from the feedstock left traders with little clarity in direction. This morning, power prices are finding support from feedstocks as oil leads the complex slightly higher boosting coal and gas while an expected drop in temperatures next week is bringing in some short covering.

    Monday 14th January 2019 - Power prices recovered on Friday with UK prices moving higher on fears of cold and taking direction from a bounce in gas prices. This morning, the market is varied with some increases on front month contracts while spot prices and longer dated contracts are flat or slightly down. Carbon is dealing lower in early trading while gas and coal prices are mostly sideways.

    Tuesday 15th January 2019 - Power prices were lower in all markets across Europe and the UK yesterday, as traders shrugged off the coming cold weather and instead traded power down with a collapse in the price of feedstocks like gas, coal and carbon. This morning, feedstocks are clawing back some of yesterday’s losses as oil halts its slide on news that china will cut taxes to boost a sagging economy, power is following with its own gains.

    Wednesday 16th January 2019 - Power prices were varied yesterday across Europe and the UK with, both German and Nordic markets falling, despite increases in feedstocks, carbon and oil while the UK power market followed NBP gas to the upside. This morning, spot prices are soft with losses in both the UK and in Germany, early curve trading is also showing some minor losses as coal and gas dip while carbon is neutral. Weather forecasts show cold weather rolling to the end of the month without any discernible warm-up yet.

    Thursday 17th January 2019 - Power prices were mixed by the close of trading yesterday, with UK and German power markets mostly increasing while the Nordics closed a bit more neutral. This morning, gas, coal, oil and carbon are all trading higher as colder temperatures take hold and forecasts are revised a bit colder for the balance of the month. The colder weather will also bring a downturn in wind production which will also help to support prices.

    Friday 18th January 2019 - Power prices were on the rise yesterday, following feedstocks to the upside while colder temperatures and a drop in wind output lifted spot prices. Weather forecasts show continued below normal temperatures for the 15-Day outlook with some slightly warmer days in that period. Stock markets have reacted positively to US talk of easing some tariffs against China and the pound continues to improve as all parties are now coming together to try and come up with a way forward after PM May survived a confidence vote.

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