Energy Market Report – Electricity

  • 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.

    Monday 21st January 2019 - Power prices were mostly up driven by cold weather, a sharp drop in renewables and a rally in feedstock prices. This morning, weather forecasts have been revised much warmer and windier sending a gut-punch to the power markets. Power prices are down in all markets following the drop in feedstocks, European markets will be well supplied in gas with 10 more LNG cargos expected before the end of this month, should the warm weather forecasts hold the market would be expected to test downside price resistances.

    Tuesday 22nd January 2019 - Power prices fell yesterday, dropping with feedstocks in the UK, gas, while on the continent and in the Nordics the drop in coal and carbon pressured prices lower. This morning, gas prices remain soft, while coal and carbon regain some of the ground lost to yesterday's move. The markets appear to be technically oversold however there is little in the way of bullish fundamentals, the early morning gains in power are likely to be limited, weather forecasts continue to look dovish.

    Wednesday 23rd January 2019 - Power prices united yesterday on all contracts in all locations as coal increased and carbon traded towards new highs. This morning, gas, coal, carbon and oil are all in positive territory rebounding or continuing to climb, pulling power prices up with them in all markets. Weather forecasts are mostly unchanged with only slightly cooler temperatures early next week, there is no drastic warm up yet in the forecast, with many national forecasters suggesting slightly below normal weather until mid February.

    Thursday 24th January 2019 - Power prices in the UK united yesterday on the back of a tight gas market and elevated prices. This morning, coal, gas and carbon are all being dealt lower as oil is falling on the back of expectations for a weekly stock build in the US crude market, while stock markets are up in Asia and Europe. Power prices are being dealt lower with feedstocks and on the impression of more mild temperatures to come in the near term.

    Friday 25th January 2019 - Power prices fell more than £16/3Wh yesterday, only Germany did worse with the drop being closer to €20/MWh. Futures prices were down in all markets as falling prices for coal, gas and carbon pressured power. This morning, the gas market has taken a further hit as forecasts return to normal conditions and more LNG cargos are set to arrive, this has put pressure on UK power and continental power, coal is also down with carbon credits, leaving only oil to make gains on geopolitical concerns and trade machinations.

    Monday 28th January 2019 - Power prices made increases in the markets around Europe and the UK as the warning days of a cold snap ended. This morning, the power market is digesting the news from the weekend that the German government aims to close out 13Gwh of coal fired power generation by the year 2022. Prices for power are down at the front end of the curve while the price for power in calendar 2021 and 2022 are up modestly. The overall bearish tone of the market looks to continue with mild weather in the 15-day forecast and a pick-up in renewable power generation.

    Tuesday 29th January 2019 - Power prices found some support in the markets around Europe and in the UK yesterday, while curve prices sank under pressure from falling gas, coal and carbon prices. This morning, power prices are down in the UK following softer prices for NBP gas and a drop in carbon prices, Germany and the Nordics are also lower on falling coal, gas and emissions contracts.

    Wednesday 30th January 2019 - Power prices were varied yesterday, the UK power market mostly increased following the NBP and the broader bullishness in oil and a weaker pound. This morning, the markets are a bit mixed, but support has generally been found. Profit taking after the protracted fall in prices coupled with hints of some cooler temperatures at the back end of the 15-day forecast are enough to bring out the buyers just ahead of the February contract expiry.

    Thursday 31st January 2019 - Power prices in the UK rallied and failed yesterday, dropping in the afternoon with the NBP gas market. This morning, a drop in demand and a pick up in wind has put pressure on spot prices, forecasts for mild temperatures into the first half of February have eroded prices. Coal, gas and carbon are all dealing lower in early trade action putting pressure on power prices around the European complex.

  • Market Comments February

    Friday 1st February 2019 - Power markets in the UK and Europe closed definitively lower yesterday, from the spot prices to longer dated calendars and seasons the direction for prices was down. This morning expects the direction to be similar, weather forecasts have turned warmer for February, dare we say winter is over? Perhaps not just yet but demand will be expected to wane into the new month.

    Monday 4th February 2019 - Power prices shadowed coal, carbon and gas down on Friday. Also, warmer weather in the forecasts added to the bearishness. Warmer weather in both Europe and Asia have added to bearishness. This morning we see power trading lower again. Lower Carbon, coal and gas coupled with warmer weather is pushing down prices. Carbon is trading near € 21.50/ton and is approaching the € 21 level, a technical support level.

    Tuesday 5th February 2019 - Coal, carbon and gas was down from the start of yesterday, with warmer weather also helping to push down prices. But a unsuccessful attempt to break through the € 21.30/ton support level for carbon spurred a lot of buying interest. This sent carbon up to close above € 23/ton, pulling power contracts up, especially late in the day (after the close for Continental exchanges). Currently we are trading around € 23/ton, slightly down for the day.

    Wednesday 6th February 2019 - Power markets were mostly unchanged to up yesterday despite a huge drop in coal, that dropped almost $1.5/ton yesterday. Input from the weather was mostly bearish yesterday, with forecasts still pointing to a warm and windy period ahead of us. We are therefore likely to see spot prices fall over the coming days. This morning power contracts are marginally up, driven by a slight bounce in coal and higher carbon.

    Thursday 7th February 2019 - UK power was unchanged yesterday as it was caught between bearish gas and bullish coal and carbon. Carbon had a strong close on Tuesday, closing just above the €23/ton figure. This spurred more buying interest, and during the day, yesterday, carbon was up above €24/ton before closing slightly lower. Coal also made increases as it failed to break below the $ 80 /ton level on Tuesday. This morning we have small gains in coal, gas and carbon, and power contracts open up across the board.

    Friday 8th February 2019 - Power markets followed the bearish fuel inputs down yesterday. In the UK, EDF said it will close down the 2 GW coal-fired Cottam plant from Sep-19. It is a 50 year old plant, and didn’t win the capacity auction for 2021/22 last year. This morning power market opens further down, with the front taking the hardest hit as the end of the forecasts look slightly warmer today compared to yesterday.

    Monday 11th February 2019 - Power prices made unsure increases in the spot, on Friday, despite a pickup in wind production and mild weather, by contrast curve prices were resoundingly lower across both Europe and the UK. This morning, gas, coal, carbon and oil prices are all down and with them power prices in the UK, Germany and the Nordics. The weather outlook has been adjusted warmer for the 15-day forecasts which has also put further downward pressure on prices.

    Tuesday 12th February 2019 - Power prices dropped in the UK yesterday, moving lower with gas, despite some support for carbon. Forecast runs this morning are showing divergent outcomes after day 10 with a split between warmer than and colder than normal, a possible reason for the market to find some support. Power prices are up marginally in early trade action with German power setting the tone for the market, carbon is also in positive territory.

    Wednesday 13th February 2019 - Power prices were down across the board yesterday in all regions and on all contracts. This morning, the market has stabilized, gas contracts are dealing slightly down with carbon and power while coal and oil are up, expect to see the markets test these new lower levels before consolidation. Weather outlooks remain mild and have become slightly warmer in the 5 and 10-day portion of the outlooks for Germany, the UK and the Nordics.

    Thursday 14th February 2019 - Power prices were varied yesterday, with UK power increasing alongside carbon and NBP gas. This morning, the markets are playing catch-up on the remainder of the late session rally as oil continues to creep higher. Up against this are robust supplies of gas and additional LNG cargos coming to Europe and the UK. However, after weeks of a bear market a stall in the declines may bring players into take profit, temporarily boosting prices.

    Friday 15th February 2019 - Power prices dropped yesterday under the weight of selling pressure on carbon products in addition to the late session reversal and reduction in gas and coal prices. This morning, power contracts are trading flat in the UK and down on the continent and in the Nordics to the closing levels of the previous session.

    Monday 18th February 2019 - Power prices closed in positive territory, capping off a week of relatively sideways trade action. The UK power market gained on a rise in gas prices and the move in carbon while markets on the continent moved in the same manner taking direction from feedstocks and the overall bullish sentiment of oil. This morning, the market continues to find support from oil and feedstocks as a bearish backdrop is out of focus from the nearby bullish sentiment and technical trading. Moderate gains in early trading will be tested to see if a turnaround is indeed possible, mild weather and a pick-up in renewable generation will provide headwinds to spot and nearby contracts.

    Tuesday 19th February 2019 - Power prices came under pressure yesterday across Europe and the UK as the favoured feedstocks in each market were found to be in surplus and dropping in price. In the UK gas prices and carbon were dealt lower and power followed while in Germany and the Nordics gas and coal weakness coupled with lower carbon and increased precipitation softened the markets. This morning, renewables are expected to reach their weekly peak productive capacity on mild weather and increased wind.

    Wednesday 20th February 2019 - Power prices united late in the session following gas, coal and carbon prices higher, the increases were somewhat more quiet than expected as strong renewable output provided some bearishness. This morning, power prices are up in the UK following some modest gains in gas and coal, while Germany and the Nordics have traded mostly flat the to the close as weather forecasts and overall fundamentals remain neutral to bearish.

    Thursday 21st February 2019 - Power prices moved up yesterday in all regions on price increases in feedstocks on a day with generally bullish sentiment from stock markets and a geo-political bounce in oil. This morning, what the market given with one had it taken with the other, power prices have retraced some of yesterday’s increases as feedstock, coal, gas and carbon deal lower.

    Friday 22nd February 2019 - Power prices were distributed lower on falling feedstocks and on a drop in the cost of emissions credits, the punishment was met out across Europe and the UK. Weather forecasts were revised warmer in the 10-day outlook for most of NW Europe adding to the pressure. This morning, the market is trading slightly lower as feedstocks remain under modest pressure, however, nothing like the move yesterday. Friday trading may see a bit of profit taking ahead of the weekend which could keep losses in check or even a bit of a bounce.

    Monday 25th February 2019 - Power prices around Europe and the UK came under further pressure on Friday, as feedstocks, coal and gas were traded lower and weather forecasts retained their warmth. This morning, power prices remain under downward pressure with carbon prices falling to match feedstock losses from Friday while an oversupplied gas market is pressuring that commodity and coal as well. upside for the market looks hard to come by with only oil retaining any value.

    Tuesday 26th February 2019 - Power prices were lower in both the UK and in Germany yesterday, driven by lower prices for natural gas coupled with mild temperatures. This morning, coal and carbon are up, while gas and oil are down, some resistance is building to the downside as traders look to take profit and positive news out of trade negotiations between the US and China buoys equity markets. Power prices are mixed with spot contracts dealing lower while curve products are in positive territory.

    Wednesday 27th February 2019 - Power prices separated yesterday between the UK and the continent, for the former, falling gas prices and a stronger pound pressured prices. This morning, coal, gas and carbon contracts are all dealing higher, on what appears to be a bit of a short squeeze after many sessions of aggressive selling with limited downward movement. Weather forecasts are a touch cooler now moving from well above seasonal normal to normal with a risk of some below normal temperatures into the final month of winter.

    Thursday 28th February 2019 - Power prices could not escape the pull of higher feedstock's and carbon contracts yesterday which rocketed up after taking a beating for the past couple of months. This morning, oil prices are retracing slightly, carbon and coal are priced around the close while gas is mostly unchanged. For the first week of March 5 LNG cargos are expected to the UK while temperatures are expected to return to seasonal normal around that time. Spot prices are up in early trade action as temperatures begin to dip from recent highs.

  • Market Comments March

    Friday 1st March 2019 - Power prices increased in all markets across Europe and the UK, bolstered by the rising price of feedstocks like coal and gas, coupled with gains in carbon credits and slightly cooler forecasts. This morning, gas is trading down slightly while coal is flat, and carbon is lower, weather forecasts have been revised a touch warmer. Coming into the last month of wither wind forecasts are expected to improve and solar will pick up as days extend.

    Monday 4th March 2019 - Power trading was varied on Friday with UK power dealing lower in line with NBP gas contracts while German power rallied with carbon, Nordic prices were mixed lower in the front on precipitation while the back rallied with carbon and German power. This morning, prices are down slightly with lower feedstocks, coal and gas, softer carbon credits and mild weather. A pick-up in wind is expected over the 15-day forecast for the countries of NW Europe.

    Tuesday 5th March 2019 - Power prices made increases in all markets and for all contracts yesterday, driven by higher input costs, coal and gas, coupled with increased carbon prices which have been on a rally for a over a week now. This morning, the same story, carbon prices are higher, and power is up with coal and this time even gas, which has arguable the most bearish fundamental back story of all.

    Wednesday 6th March 2019 - All inputs to European power markets were bearish yesterday, and prices came off. For German power it was the first down-day in 6 days, lead by a large fall in coal and the first down-day to carbon in 8 days! Apart from the Nordic area temps remain at or above seasonal average for the next 2 weeks. Wind is also going to be healthy this week for most areas, and in general, the input from the weather side is still to the bearish side. This morning, we see coal coming off further, and gas is also weak. This is leading power contract lower from the start of the day.

    Thursday 7th March 2019 - Lower fuel inputs sent power markets across Europe down yesterday. Coal was also in a big move down, and with weather also being on the bearish side, power found no strength anywhere. This morning, we see carbon just below €22/ton and coal and gas is also coming further off. This is sending power further down.

    Friday 8th March 2019 - Mild weather and bearish gas gave purpose for power prices to dip in the UK and Germany while the less liquid Nordic market hooked on carbon and rallied. This morning, coal, gas and oil are down while carbon is unchanged, spot prices are holding their own as temperatures dip slightly. Power has made very modest increases in early trade action but with a generally softer complex and cuts to both GDP forecasts for Europe and the UK bullishness may be contained.

    Monday 11th March 2019 - Power prices made increases at the end of a bearish week in the energy complex, despite sideways prices for gas, while coal, oil and carbon were all dealt lower. This morning, power prices are slightly softer, weather forecasts are warmer, solar and wind outlooks are both stronger, while gas and carbon prices are down slightly.

    Tuesday 12th March 2019 - Power prices were under pressure yesterday in the UK as the market took note of dropping gas prices coupled with lower carbon and a stronger pound. This morning, carbon has reversed its drop and has helped to lift power albeit not enough to cover the fall from Monday. For UK traders and buyers, the pound rally on EU concessions is hope that the BREXIT will be more orderly than disorderly.

    Wednesday 13th March 2019 - Power prices in Europe and the UK were dealt lower yesterday, spot UK power and calendar contracts for both German and Nordic power made increases. Weather outlooks for wind remain robust out until the end of the week while temperatures are moderate. This morning, coal is down while gas and carbon are modestly softer, support for power will be hard to come by. The BREXIT saga might provide some support to UK power and gas if the pound weakens, however, in early trading the sterling has rebounded from yesterday’s low.

    Thursday 14th March 2019 - Power prices in the UK followed gas to the downside, as the European energy complex came under pressure. This morning, the power markets are clawing back some of their losses from the previous session, coal and oil are up, as is carbon, while the perpetually bearish gas market is sideways, which considering the recent falls is almost bullish. Parliamentary machinations will continue to be a focus of the market as pound/euro volatility creates opportunities for both traders and buyers/sellers alike.

    Friday 15th March 2019 - Power prices moved in different directions between the UK and the continent yesterday, falling gas price too UK power down while stronger coal and carbon helped German and the Nordics to make gains. This morning, the broader energy complex is slightly up while gas continues to be a bit soft.

    Monday 18th March 2019 - Power prices filed in unity on Friday, spot prices increased in all markets across Europe and the UK while curve prices were dealt lower as traders sold power down in line with falling feedstocks, gas and coal, and carbon. OPEC will meet and try to hold the line on supply cuts to try and balance the market while the Russians and Iraqis have sounded less enthusiastic.

    Tuesday 19th March 2019 - Power prices were distributed lower yesterday coming under pressure from a drop in carbon, mostly unaware of a late session rally in gas and oil. This morning, weather forecasts have shifted slightly colder for the end of the week, gas and oil prices are up and renewable production is down. The set up is clear for a bit of a rebound in prices after a steady decline over the past week.

    Wednesday 20th March 2019 - Power prices found support from buyers in Germany and the Nordics closing positions ahead of a return to normal temperatures and bit more demand. This morning, power prices are softer on the back of forecasts that show a slightly milder outlook for temperatures with a modest pick-up in renewables. There are few, new, inputs to the market and after quite a bearish run we could expect a move into a sideways market as players look for fresh inputs to the narrative.

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