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.
Friday 28th February 2020 - There was red all over the screens for power traders yesterday with contracts selling off in all markets and across almost all contracts, only the the Day-Ahead UK power managed a gain on supportive spot gas. Stock market sell offs continued to pressure commodities as the contagion of bearishness is spreading faster than the spread of the virus that perpetuates it. This morning, UK power is trading flat to the previous close in thin volume as traders watch for further downward movement in the UK gas market, German and Nordics power is down with coal and carbon as markets for power remain bearish across Europe. Weather forecasts have come in a touch warmer from yesterday which could add additional pressure to prices.
Market Comments March
Monday 2nd March 2020 - UK power prices were lifted on Friday, following gas contracts as traders rolled positions prior to the expiry of the March contract. Weather forecasts have been maintained at or above normal for the time of year as winter weather continues to be a no-show. German and Nordic power fell on bearish sentiment and robust renewable power generation. This morning, German power is up with a return to tentative buying interest powered by a gain in stocks and oil prices as central backs vow to fight the economic maladies. UK power prices are flat from the open but may get a bit of a lift if gas is pulled up with other commodities, currently coal, oil and carbon are positive in early trade action.
Tuesday 3rd March 2020 - UK power followed gas to the upside, driven by a collapse in the value of the pound which makes importing energy more expensive, continental markets were broadly unchanged while the Nordics were down on continued mild, wet windy conditions. This morning, weather forecasts have been revised slightly warmer, particularly in NW Europe, European stock markets are up following on gains yesterday in the US coupled with a bounce in oil. power is trading flat in both the UK and Germany in early trade action, while weakness continues in the Nordics. Markets continue to be on edge as trade action appears to be very headline driven, announcements from G7 and OPEC+ are on deck today and on the 5th of March
Wednesday 4th March 2020 - UK power prices lifted with gas and coal yesterday despite mild conditions and a generally bearish scenario for markets continuing to unfold. German power followed gas and coal to the upside as well, while the Nordic market remains water logged and managing high reservoir levels across hydroelectric infrastructure. This morning, gas and coal contracts are slightly down along with oil and carbon, creating some additional pressure on power prices in all European markets and the UK. Wind power output is expected to increase over the weekend into next week which will pressure spot contracts, temperatures will remain mild.
Thursday 5th March 2020 - UK power prices sank with softer gas prices as the market continues its sideways shuffle lacking clear up or downside direction, a lift in carbon contract prices did little to support electricity which took more from the bearish oil sentiment on the day. European power markets were mixed, finding some minor support on the longer dated calendar contracts and losing value on the months and quarters which comprise the balance of 2020. This morning, oil and coal are slightly down while gas is finding some moderate support from a tight supply/demand balance in the spot market, carbon is sideways. As a result, power prices in the UK are up a touch, along with German and Nordic power, however, the mild weather and renewable output should keep the gains limited.
Friday 6th March 2020 - The UK power price came under pressure yesterday as NBP gas and carbon prices were dealt lower, German power was sideways while the Nordics bounced on drier conditions. Weather forecasts have been revised slightly cooler, though still near seasonal normal, wind speeds forecast strong wind generation over this weekend before returning to levels similar to today next week. This morning, UK power is marginally softer on the back of slightly lower gas and carbon prices. Lower coal and oil will apply bearish sentiment and pressure power prices in neighbouring continental markets. Nordic power has the most support with drier conditions though is still dealing marginally lower in early trade action.
Monday 9th March 2020 - Power prices tumbled in the UK and on the continent on Friday, save for the Nordics on the bearish sentiment from failed OPEC+ negotiations and a sharp drop in crude prices, weakness in gas, coal and carbon added to the pressure, drier conditions left the Nordics to gain. This morning, commodity feedstocks are reeling from the more than 25% drop in oil prices that have hit the markets causing a massive sell-off in equities around the globe. Coal, gas and carbon are all in the red today, though the losses pale in comparison to the moves in Brent crude. Fundamentals continue to be bearish for power as what was barely a winter comes to an end and feedstocks shed value, recession fears are now on the rise and central banks and governments may have little ammunition to fight this battle.
Tuesday 10th March 2020 - Power markets around Europe and in the UK were dealt lower yesterday but not in the spectacular fashion of oil or the broader equity markets the losses were marginal in the UK, following the retracement in gas and carbon prices which fell in sympathy with the massive moves in oil. Spot prices bore the brunt of the bears wrath as temperatures and wind production for the 15-day outlook peaked yesterday, which should give rise to spot prices from today as demand will lift and carbon based fuels will come back on-line. Oil and stocks are having a modest bounce this morning as governments are acting the US is looking at stimulus measures and all of Italy will go into lock-down. Gas, coal and carbon are all in the back this morning, giving an early boost to power prices, markets will continue to be dominated by macro events the oil price war between Russia and Saudi Arabia and the coronavirus response.
Wednesday 11th March 2020 - UK power prices gained on Tuesday, lifted by rising feedstocks, coal and gas, coupled with a jump in carbon and associated strength in the spot. German power was also lifted by feedstock and carbon strength, while the Nordics followed the wet weather downward. This morning, the Bank of England cut interest rates and the Minister for health has gone ill with COVID-19, Italy is considering doubling its financial response while the much anticipated US economic package announcement has been delayed. Power price inputs, gas and coal, are down with carbon, oil is flat while stock markets in Europe are firmer. UK power is down slightly with the rest of the European power markets as the primary drivers continue to be the feedstocks.
Thursday 12th March 2020 - Today, the world wakes up to more countries locking down schools and public institutions and the US travel ban between America and Europe. This has resulted in power prices dealing lower in early action with softer feedstock prices.
Friday 13th March 2020 - Power prices across Europe and the UK moved lower, following on the drop in coal and carbon prices and aided by slightly softer gas pricing. Compared to the record moves on European exchanges and the massive declines in the US, the loss in value for power contracts looks downright trivial. This morning, oil and the global energy complex is taking a bounce along with equity markets, perhaps only a dead cat bounce, as the billions promised to support markets have persuaded some traders to buy. Power prices are following on the minor gains in coal, gas and carbon and the lift from oil and equities, in early trade action.
Monday 16th March 2020 - Power prices in the UK were mostly unchanged after trading on Friday with the only noticeable gains coming on the spot market. In Germany prices eased slightly with gains in the spot and the Nordics gained on cooler temperatures and falling precipitation. This morning, feedstocks are taking another hit with oil signalling a downward direction, loss of economic activity has carbon contract prices flirting with the 20EUR handle while gas and coal are softer. Weather forecasts call for temperatures to dip below normal to the end of the week and next with less wind and precipitation.
Tuesday 17th March 2020 - Global markets left many traders scared yesterday after massive sell-offs rolled across every asset class and commodity. Feedstocks for power and carbon credits all took a hit dragging power prices down, not a single contract was in positive territory by the end of the day. G7 leaders will meet by telephone today to discuss coordinated measures, while the IMF is ready with 1 TRILLION dollars, you heard that right, of capital ready for injection to struggling members of the global economy. This morning, stock markets in Asia, and now Europe are up, around 4% in the latter, after falling 5% the previous day. Gains in feedstocks are lifting power prices and carbon has bounced 50 cents providing additional lift. Cooler temperatures and less wind could also help to lift demand in the spot over the coming days.
Wednesday 18th March 2020 - Power prices bore the brunt of falling carbon prices and lower feedstock costs yesterday, with the biggest losses in Germany followed by the UK which use more carbon based power than the Nordic region. An auction for EUAs had to be cancelled due to low demand as the slowing economy foretells lower carbon emissions from both power generators and industry. Rates of demand for power are showing signs of contraction with levels approaching near those of the financial crisis for Italy and Austria, falling demand is expected to cascade northward as restrictions take hold in NW Europe. Power prices remain under pressure this morning as feedstocks and carbon take a minor early morning dip, stock markets are down 3% as more stimulus measures are announced.
Thursday 19th March 2020 - Power prices saw some support yesterday in spot markets across Europe as slightly cooler temperatures and a drop close to zero in wind power output in major markets like the UK and Germany. By contrast, forward contracts took a hit as carbon prices bled out 3EUR in value and feedstock prices softened. Looking at fundamentals, Italian electricity demand continues to show increasing weakness, as expected from the cutback in industrial and commercial demand. Current year-on-year declines are running roughly 14%. the drop in France is about 8%. Japan and Korea show lesser declines, year-on-year as virus stabilization is further advanced in those markets. Power prices are up in the UK with gas and support from Germany and coal gains carbon has clawed back almost 1/3 of its losses.
Friday 20th March 2020 - Power markets followed their own dominant feedstocks yesterday as the chaos in the broader markets melted into the background. UK power prices were lifted with gas and carbon, only spot prices were dealt lower to trade flat to the front month. German power prices followed the drop in coal shrugging off the gains in carbon and continental gas while the Nordics moved up on drier weather conditions and falling wind power output. This morning power prices in the UK are broadly unchanged, trading flat with gas, the gains in carbon might provide some support if nothing else moves during the day. German power is mostly unchanged to slightly down with coal while Nordic prices are bid on at yesterday's closing prices.
Monday 23rd March 2020 - UK power prices tumbled with NBP gas and slightly softer carbon contract prices on Friday concluding a bearish week for power as demand wanes in the face of factory shut ins and increasing measures of virus containment. Italian power demand, in the hardest hit country, has fallen 10% March to date vs. the 5-year average, similar drops are expected across Europe. Wind production is also expected to fall in both Germany and the UK which could boost demand for gas and provide some support to prices. This morning, power prices are under the most pressure on the balance of 2020, longer dated contracts show more support on expectations of a return to normalcy, softer, coal, carbon, oil and equities influence the mood.
Tuesday 24th March 2020 - Power prices in the UK followed on the movements in the gas markets yesterday, while the dip in coal and carbon prices added to the bearish moves in the UK and on the continent as well. The drop in temperatures in NW Europe and the UK to below the seasonal normal and the drop in wind power production is expected to bolster spot prices as demand picks up and more costly generators are called to produce. This morning, the spot prices are indeed up, showing a premium to April pricing, longer dated contracts are also making early gains on the lift from coal, gas and carbon. Cooler and drier conditions are being offset by some additional sun lifting production from solar installations. Equity markets are up in both Asian and Europe as the virus has shown to be very stable in the East and might be starting to slow in Italy, with the UK on lockdown case load peaking and declines could come in a number of weeks for NW Europe.
Wednesday 25th March 2020 - Power prices went south in the UK yesterday, driven down by gas and a stronger pound, in stark contrast to trading in Germany and the Nordics where prices gained as carbon contracts were lifted by over a euro and coal
prices moved higher. This morning, cooler temperatures, lower wind and gains in feedstocks, particularly coal are lifting power prices, carbon is having another strong start with gains of another euro in value for the permission
to pollute, despite the shuttering of factories across Europe and the UK. Equity markets are still gaining after massive moves in the US yesterday cautious optimism in the face of continued expansion of the coronavirus.
Thursday 26th March 2020 - Power prices were dealt lower in the UK falling along with other power prices in the absence of a drop in gas prices and despite a rise in the cost of carbon offsets. German and Nordic power prices also dropped as demand is set to fall lower due to commercial and industrial curtailments. Cooler weather and low wind output may offset some of the lost demand on the continent or in the Nordics where power is used for heating, but in the UK and German which use gas for this purpose power demand and price could be weaker. This morning, Germany leads prices lower, despite coal prices remaining unchanged and gas mostly flat day on day, weak carbon costs and low demand are the driving factors. UK power is a touch softer and should come off with carbon even if gas is mostly unchanged.
Friday 27th March 2020 - Today, the carnage continues as more demand is lost to the virus precautions/measures being undertaken, coal and gas, along with carbon and oil are dealing lower which is opening up space for prices to drop. Equities markets are up in Asia but have opened about 2% lower across Europe as gains from the past 3 days are marginally retraced.
Monday 30th March 2020 - This morning, power contracts are some modest early pressure while spot prices are positive on weather driven demand. Feedstocks, gas and coal coupled with carbon are all down with coal being the biggest loser and currently the most expensive form of power generation. Equity markets in Europe are down along with most commodities, traders continue to search for bottoms but the consensus is that a turn in the medical situation needs to happen before a price recovery can begin.
Tuesday 31st March 2020 - UK power prices declined with NBP gas despite a bounce in the cost of carbon credits, Nordic power also fell as expectations for increasing hydro balances left the market all wet, in Germany modest gains were made on the back of carbon moves despite weaker feedstock prices. This morning, equities are up in Asia and in Europe, oil has had a lift after the US and Russian energy ministers agreed to discuss the global oil market. Coal and carbon have received a lift from oil and power in Germany is also on the move up. Gas is flat to slightly positive at the open which could spell at least support for UK power in spite of very poor demand at the moment. Some optimism that there is stabilization in the COVID-19 outbreak in Italy and Spain gives hope to countries which have enacted subsequent lockdown measures.
Market Comments April
Wednesday 1st April 2020 - Today, power prices are down, pressured by feedstocks and a drop in the cost of carbon offset permits. European equities are down at the open of trading and oil is down as the OPEC+ supply cuts expire freeing members to pump at will into a supersaturated market. There is positive COVID-19 news from Italy however it has been overshadowed by grim statistics in Spain and a growing caseload in the US.
Thursday 3rd April 2020 - This morning, a bounce in oil and a modest uptick in stocks coupled with a tight gas market has upped prices for NBP gas and has lifted UK power. Carbon and coal are also dealing higher giving a lift to continental power prices as well. News on the coronavirus front has both Italy and German extending lockdown measures with reluctant American states like Florida joining the fray.
Friday 4th April 2020 - The world surpassed 1 Million confirmed cases of COVID-19 last night and more than 50K deaths with Italy and Spain accounting for almost half of the total loss of life, Italian and Spanish cases of the virus continue to stabilize, however, deaths continue to hit new highs in the latter. Power prices found some strength yesterday, despite lockdown induced constraints on demand, feedstocks and carbon credit prices helped with the lift. This morning is a touch softer with coal and gas offered marginally lower than yesterday's close and carbon trading flat. Mild weather is offset by lower renewables production which is giving some support to spot and near-term prices.
Monday 6th April 2020 - Power prices in the UK and on the continent got a lift from gas and risk on oil sentiment despite softer coal and carbon pricing. Temperature as will be well above the seasonal normal this week which could add to spot pressure, although the lower wind profile will require gas to help balance out power demand. This morning, the virus news has improved in both Italy and Spain as infections and deaths stabilize and drop, however over the weekend UK PM Boris Johnson was hospitalized as a precaution, his higher fever has persisted for 10 days. Equity futures point higher along with gains in Asian suggesting a risk on attitude at the opening bell for stocks, gains in German power and carbon are leading UK and Nordic power higher, along with bid strength in coal and marginal support from gas.
Tuesday 7th April 2020 - Today, carbon, gas and coal are all up as are European equity markets and oil, power is following with gains in all markets. The excitement will continue as good news continues, some caution should be considered on the condition of the UK PM and the numbers in the US which will likely worsen before improving.
Wednesday 8th April 2020 - Power traders have been trading equities via carbon contract over the past couple weeks as the most liquid product they trade has mirrored the stock markets in Europe and the US. Power prices themselves have made smaller moves by comparison, closing higher yesterday with a lift from feedstocks and optimism regarding the lifting of lockdown conditions. This morning, weather forecasts have been nudged up above normal for most days in the15-day outlook with marginal increases in wind, solar and hydro power production. the big mover is carbon and the markets which point lower today, causing an early bout of selling from the open. G20 energy ministers and OPEC+ will meet virtually on Thursday to discuss stabilizing the global oil markets, cutting production, if successful commodities may have a chance to stabilise
Thursday 9th April 2020 - Power prices in the UK fell with gas yesterday as pressure on power fell across Europe into the Easter holiday weekend. Only oil an carbon managed to make gains as feedstock's reversed course focusing on the drop in demand and the supply glut. Today OPEC++ meets, from a safe distance, to discuss a global effort to stabilize prices by cutting production across all major oil producers, unlikely allies include Norway and Canada who have signalled a possible willingness to participate while the US position is coy on whether it will be joining the alliance. This morning, along with feedstock's, equities and carbon, power prices are getting a lift from a bit of sentimental optimism as the market becomes cautiously more bullish.
Tuesday 14th April 2020 - Power prices took a break over the Easter holiday, spot prices delivered low with warm temperatures and plenty of wind and sunshine. New cases of COVID-19 in Spain and Italy continued to drop along with deaths as the health systems in these battered countries regain their footing, plans to re-open economies are beginning in some European countries like Austria and Denmark, along with Israel in the middle east, by contrast major economies remain under lockdown and extensions have been announced for the UK and France with Turkey adding weekend curfews to its restrictions. In early trading, coal and gas are softer along with carbon contracts, giving pressure to German and UK power prices while Nordic contracts hold their own as hydro conditions become drier.
Wednesday 15th April 2020 - It was a mixed start to this week's trading for power contracts across Europe and the UK, falling coal and gas prices coupled with declining costs for carbon contracts signalled lower prices for power in both the UK and Germany. The Nordics priced higher on forecasts for reduced precipitation a key factor in a market dominated by hydro-electricity and the lowest prices for wholesale power in NW Europe. This morning, markets are neutral for gas and coal at the start of trading, softer equity markets and concerns over bearish results from earnings season have pressured carbon prices from the open. Power prices are down in all markets at the start of trading, enthusiasm from the gains in equity markets over the past week has not translated to energy market strength as the sector remains awash in surplus feedstocks and constrained demand.
Thursday 16th April 2020 - UK power prices sank across the board as gas prices tumbled and the energy complex soured. Oil dipped below $20/Bbl taking commodities lower as earnings season disappointed investors, the retractions in profits, losses and lack of forward guidance caused traders to hit the sell button. This morning, the market has rebounded with news that the US may pay those drilling for oil to leave it in the ground as part of the US strategic reserves, carbon is up, and feedstocks have also clawed back some losses to boost power prices in early trade action.
Fridau 17th April 2020 - The drop in French nuclear power availability over summer boosted UK curve prices, although the prompt sustained losses. Expectations of more carbon intensive energy requirements on the continent stimulated buying activity in the carbon markets, which fed through as increased power costs despite continued weak demand outlook. Q3 contracts made the biggest gains, with Q3 closing up £1.83/MWh at £30.43/MWh, and Jul finishing £1.81/MWh higher at £29.27/MWh. Front end activity remained bearish amid higher wind generation forecasts, which is set to more than double over the coming days.
Monday 20th April 2020 - On Friday, UK power got a lift from gas and carbon as power traders followed bullish sentiment from the stock markets to the upside. At the start of a new week, Europe begins to slowly reopen, with German states allowing for small shops to open, similar moves are happening in Austria, with Italy and Spain planning their first moves as well. Trading today prices are a touch softer on bearish commodity complex and lower carbon contracts. Wind output is high but forecast to drop to almost zero by midweek in both Germany and the UK, only equities are in the black, but marginally and traders will decide if we are firmly in a bull market yet again.
Tuesday 21st April 2020 - UK power prices tumbled with natural gas and carbon prices yesterday, German and Nordics followed as the global energy market's traders watched in horror as US oil prices went to zero and then negative trading as low as -$40/Bbl, prices have rebounded this morning to $0.10/Bbl for the soon to be expired May contract. Germany hit a new record for solar production this year, not a surprise as it has more solar panels this year than in year's previous, wind output also contributed to pressuring spot prices. This morning, feedstock prices are flat to slightly lower and carbon contracts have fallen in early trade action, power contracts are dealing lower. News that both Germany and Italy will re-open their economies very slowly may be negative for stocks as earnings season rolls on, lower cases on new virus infections in both European and American hotspots are cause for optimism.
Wednesday 22nd April 2020 - The UK power curve sold off yesterday, in line with bearishness across the commodity complex. A glut of LNG in the NBP gas market added pressure to near dated UK contracts yesterday, amid worsening demand outlook as the nationwide lockdown is set to continue for the coming weeks. May’20 shed 3% of value, closing at £24.71/MWh. Hitherto well-supported further dated curve contracts began to show signs of relative weaknesses amid poorer medium term outlook, with Jul and Q3 closing £0.92/MWh and £0.95/MWh lower respectively. However, Day Ahead drew strength from lower anticipated renewable generation on Wednesday, closing up by £6.10/MWh for the day at £15.08/MWh.
Thursday 23rd April 2020 - Prompt UK power traded higher yesterday amid lower anticipated wind output and high gas exports, with the Day Ahead closing £8.17/MWh higher at £23.25/MWh. The near curve also made modest gains, buoyed by strength across oil and carbon markets, as well as news of nuclear outage extensions in France. Q3 closed £0.17/MWh higher at £30.20/MWh. Bullish sentiment was muted, however, by the prospect of high LNG imports over the coming months and decreasing spare continental storage capacity. Far curve contracts drifted lower, with Winter’20 closing £0.06/MWh down.
Friday 24th April 2020 - The European power markets remain a tale of oversupply, Nordic hydro levels are at record highs and the front month contract is trading at a value of 20% of its German counterpart and 25% of its UK counterpart. Feedstocks for the UK and German markets closed yesterday, taking both markets lower, with the greatest impact being on near term contracts while longer dated ones retained more of their value. Despite falling power and feedstock prices carbon edged up with oil to close out trading on Thursday. This morning, equities and carbon are down, and feedstocks are sideways in early action. Price movement on power is slightly lower as the sentiment today is a touch bearish, only oil is holding up in the black.
Monday 27th April 2020 - Over the weekend major players in the OPEC+ coalition began to cut production ahead of the May 1st start date. Lower infection rates in European and American hotspots and falling daily death counts is prompting an acceleration of plans to open parts of these western economies. Q2 earnings season is underway and with mixed results and improving virus sentiment stock markets have started this week in positive territory in Asia and Europe with American futures also in positive territory. Today, oil is down while coal and gas are flat, power prices are gaining with carbon on equities and sentiment over the relaxation of Coronavirus restrictions. The UK PM is expected back to work after his recovery from the virus as the UK begins to formulate its plans for reopening its economy.
Tuesday 28th April 2020 - Today, feedstock's remain under pressure, coal and oil are down while gas is trading flat, carbon contracts are down marginally. Equity markets in Asia have made gains while European stock markets appear poised to open higher despite mixed results from earnings. In early trading all markets are down with the greatest losses in Germany, only the spot has trading in the UK as of writing.
Wednesday 29th April 2020 - This morning, gas and coal are stronger, and carbon is in positive territory, this is lifting contracts in both the UK and Germany, by contrast a turn to wetter conditions in the Nordic region is putting pressure on prices as reservoirs must manage ever growing hydro levels. Positive sentiment from stock markets and equity futures at the open, as well as gains in oil which man help to further drive upward sentiment.
Thursday 30th April 2020 - UK power fell yesterday following the moves in NBP gas, despite gains in oil, coal while carbon was unchanged. Power weakness has come from spot demand faltering despite the gains in some feedstock's. This morning, contracts are gaining in the UK, German and the Nordics, coal and gas are dealing higher along with carbon and the European equities markets. Norway has cut oil production for the first time in almost 20 years, joining OPEC+ in trying to support the oil industry through an unprecedented decline in demand.
Market Comments May
Friday 1st May 2020 - This morning is a holiday in many continental countries, so trading volumes are expected to be lower, Monday will be a bank holiday in the UK. With feedstocks and oil up, and carbon, flat UK and German power are pricing gains to the previous close, the Nordic power market is shuttered.
Monday 4th May 2020 - Today, markets are sideways, softer prices for oil and products coupled with a marginal increase in gas and lower carbon are keeping power prices in check. Demand is returning to markets with Germany showing the smallest deviation from normal at -5%, Spain, France and Italy are -10% while the UK shows the greatest decline of -15% from seasonal normal. Metrics for air travel and driving are all increasing with the US and Germany now at 70% of normal for the latter. Economies continue to slowly reopen.
Tuesday 5th May 2020 - Power prices fell across the board in the UK and across all European markets despite cooler than normal temperatures and low renewable output. Falling costs for feedstocks like NBP gas in the UK and coal on the continent pressured prices. This morning, oil is making gains as Brent is eyeing $30/Bbl, after news from 2 European majors that they would not cut dividends, lifting their share prices and the sector. Weather forecasts are still mostly cooler than the seasonal normal helping to support some demand. Gains in coal and gas from the open are also helping to lift power prices across the curve as the market is looking to lift the much maligned energy sector.
Wednesday 6th May 2020 - Power contracts in the UK and across Europe were somewhat mixed by the closing bell but moved generally higher throughout the session along with strong performances from coal and oil. It is a quiet start to trading this morning, global stock markets and equity futures are mixed with small gains or losses, oil has retraced some of its gains from the past 5 days, while the pound strengthens, and the euro sinks. Power prices in Germany are up modestly with carbon and the Nordic is following. Coal and gas are flat to the previous close and UK power prices are only up modestly in this volume with carbon.
Thursday 7th May 2020 - Warm weather into the weekend strikes a bearish tone on the prompt, while low wind output and near normal temperatures thereafter could signal some additional support. Power markets are focused on the ever changing nuclear power production forecasts from France which will determine how much additional demand for conventional fuel sources will be required for the summer and where prices will go. This morning, coal has made minor gains while oil, carbon and gas trade slightly down or flat to the previous close. Equity markets are positive as economic restarts across Europe are expanding and accelerating. Power is trading mostly flat in the UK, Nordics and Germany in early trade action.
Monday 11th May 2020 - Power prices made gains on Friday, in both Germany and in the Nordics while the UK market was shuttered, trading volume was very low due to many nations taking a holiday. This morning, Equities have kicked off the week in positive territory, starting in Asia and continuing in Europe, with equity futures pointing to gains for the Americas as well. Coal, Carbon and oil are down slightly while gas is more or less sideways in early trade action.
Tuesday 12th May 2020 - Power prices were slightly softer yesterday in both Germany and the UK as gas and coal, dipped along with oil, equities and carbon. Today, prices are under a little pressure as carbon swoons and coal dips lower, oil and equities are up marginally, and gas has not yet chosen a direction. Both commodities appear to be in a holding pattern right now, with moves higher for the latter coming up against technical resistance, a breakthrough for stock markets could lift commodities higher, a signal major economies are on the mend.
Wednesday 13th May 2020 - Falling gas and coal prices pressured UK power prices, while weaker carbon piled on the misery. Today feedstock prices are flat while carbon contracts, oil and stock markets open up in the red. It has been a slow week for news thus far and without renewed strength in equities or other commodities power prices have moved in a sideways fashion.
Thursday 14th May 2020 - Feedstocks for power production, gas and coal were dealt lower yesterday, along with oil and equities in a risk off trading session. So, despite cooler weather and slowly rising demand, power prices drifted lower in the UK across most contracts with summer and nearer dated ones being hardest hit. On the continent, prices were lower and even minor gains in carbon could not lift sentiment, Nordic power followed its German neighbour lower. This morning, feedstocks look poised to make some early gains on the back of oil strength and increasing demand as lockdowns ease, bearish headwinds are coming from stock markets. German and Nordic power have printed trades at the levels of the previous close while the UK is bid on at these levels with no recorded trades as of writing, a slow and indecisive start for the markets.
Friday 15th May 2020 - Today UK power follow through on gains in oil with US WTI crude closing in towards $30/Bbl. lifting coal and gas. The gains in feedstocks and carbon are pushin up power prices across all markets in early trade action, positive sentiment from European and Asian stock markets and US equity futures is bringing risk on sentiment back.
Monday 18th May 2020 - Power markets made solid gains on Friday, moving higher with carbon and feedstock's as renewables production demand continues to slowly pick up. This morning, oil and equities continue to make gains as global supply cuts in the former reduce the supply glut lifting prices for both WTI and Brent above $30/Bbl. Feedstock's are stronger with gas and coal dealing higher, lifting power prices in the UK, Germany and the Nordics. Rising emissions costs are also providing support to power prices in early trading as market participants become more confident in the economic recover as states reopen their markets.
Tuesday 19th May 2020 - Power trading was mixed yesterday with scattered gains and losses in the UK, weakness mostly focused on the balance of summer contracts, as gas trading drove the market. In Germany gains in coal and gas coupled with mighty gains in carbon lifted most of the contracts, by contrast Nordic power floundered even in the face of the moves in feedstock, carbon and neighbouring markets. This morning, oil and equities rise; however, coal and carbon retrace some of yesterdays gains. Holidays this week on the continent and next week in the UK will keep most trading volume low with reduced risk appetite expected.
Wednesday 20th May 2020 - Today, coal and gas are flat to slightly down, while carbon and oil are just marginally positive. European equities are down while American equity futures remain positive despite some negative press regarding the vaccine results from Moderna. Power is trading slightly lower in early action.
Thursday 21st May 2020 - Carbon made outsized gains yesterday, trading up over 1 EUR, lifting power markets in the UK and across the continent with only the Nordics dealing primarily lower. Gains in oil, coal and carbon lifted power prices and sentiment in the Energy complex with only natural gas bucking the trend. This morning, markets are trading in very thin volume due to the Ascension Day holiday which has most continental countries off for the day and the Nordic power market is closed. Major markets remain open for trading, gas and coal are dealing lower with oil trading higher. UK power remains supported with only the spot showing weakness thus far as gas prices remain firm on the seasons and only softer on the spot and balance of summer.
Friday 22nd May 2020 - Power prices moved lower yesterday across all markets as the European energy complex was led downward by natural gas weakness. In the UK, high wind power output coupled by weak holiday demand on the continent and an upcoming bank holiday swung consumption lower as the bottom fell out and support evaporated. This morning, stock market weakness in Asia, driven by a power grab from Beijing over Hong Kong, heated rhetoric between China and the US over COVID-19 and disappointment over the communist party's decision to abandon growth targets for this year is leading global equities lower and has pulled oil down, resulting in further weakness to coal and gas. Power prices are softer and may finally break down closer to the falling feedstocks, the carbon wild card has been resilient and helped to lend support to power prices across all markets.
Tuesday 26th May 2020 - Power markets roared yesterday making gains in longer dated contracts across the continent while the UK took the day off for a bank holiday. Strength in equities and energy commodities drove risk on sentiment that drove higher all but prompt Nordic contracts. This morning, oil and equities continue to make gains on economic openings, bullish news from the oil market about a possible rebalancing of supply/demand fundamentals by the end of summer and increased Chinese demand for both oil and coal is lifting commodity backed currencies. By contrast, European energy markets look soft this morning with gas and carbon dealing slightly lower and power losing steam after yesterday's gains.
Wednesday 27th May 2020 - Today, energy markets in Europe are playing defence as the bears take another swing at prices. Oil, coal and gas are all slightly weaker, and despite a drop in wind, sluggish 'holiday levels' of demand and mild weather are providing little support. German, Nordic and UK power are all in the red, with most losses focused at the nearby contracts, slightly more support is offered to seasons and calendars.
Thursday 28th May 2020 - Power prices in the UK fell yesterday with natural gas, while German and Nordic power, fell with coal, gas and carbon pricing. Today, the market remains soft, with demand waning on warm weather and a coming long weekend on the continent. Bearish sentiment from oil is also hindering gains in the global energy complex, which today translated into continued weakness in power prices. Gains in equities and equity futures are doing little to support the global energy complex, despite a risk on attitude across the globe as economies begin to reopen. Overall, the market is down marginally, with conflicting drivers keeping losses to a minimum as trading picks up, despite lower volumes over the last couple weeks.
Friday 29th May 2020 - Gas, carbon and coal was down yesterday, and power markets followed suit. Only Nordic power was supported by slightly drier forecasts. UK and German power set fresh lows yesterday for front month contracts, following gas prices down. It is a consequence of the low gas prices, and favourable spark spreads. Today, EUA's are up and so are most of power contracts
Market Comments June
Monday 1st June 2020 - Power markets took some input from the upward move in gas and carbon on Friday, however with coal down, the inputs were not clear enough, and moves on the continent remained small. UK power were more decisive in following gas markets up. and wind generation is set to increase during this week, while temperatures take a dip from the currently above normal levels. Some of the bigger European countries reiterate their commitment to the green agenda, and the Commission still seems committed to pursuing carbon reductions despite current economic troubles due to COVID-19 Mos power contracts are down this morning together with gas.
Tuesday 2nd June 2020 - Power prices came under pressure yesterday from declines in feedstock values and lower costs for carbon credits, low wind output lifted spot prices even as holiday demand and mild weather provided headwinds to price gains. This morning, oil, coal and gas are all in the black, on optimism that OPEC+ will extend production cuts for another couple months to help ease the global oil glut, lifting commodities along with the gains in equities. Protests and discord in the US have sent stocks lower and are creating a great risk to economic and medical recovery, in Europe markets are gaining from yesterday on the back of positive gains in Asia, power contracts are up in Germany and the UK, while the Nordics go their own way.
Wednesday 3rd June 2020 - Power prices were lifted in the UK and across Europe from the spot to longer dated contracts on a symphony of bullishness in feedstocks, commodities, equities and emissions. Oil drove the energy complex higher as enthusiasm for possible OPEC+ supply cut extensions spilled over to coal, gas and finally power. Gains in equities in Asia led a virtuous cycle of increases in Europe, particularly Germany, which lifted carbon on the hopes more stimulus would increase the value of emissions offsets and in turn spark a power rally. This morning, power prices are up in German, the Nordics and the UK on increasing spot demand, as temperatures dip, while continued, albeit modest, gains in feedstocks; coal and gas, support and increase the value on the forward curves.
Thursday 4th June 2020 - Today, a retracement in the European energy complex is casting a shadow over power prices in the UK and across the continent. Bearish sentiment from oil and equities is pushing some traders to take profit as fears emerge that the rally has overshot the fundamentals, a similar mood has crept into the power market and early trading shows the market following the broader view. On the bullish side the ECB will come with more stimulus and Germany will enact a range of tax and spend measure to stimulate its economy.
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