Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 12th September 2014
Short and long-term power and gas contracts showed diverging trends this week, as continued geopolitical tensions and a strong supply picture both influenced the market. Short-term contracts were down with returning supplies, as day-ahead gas dropped 6.7% to 44.9p/th on returning continental imports. Day-ahead power followed the falls in gas, decreasing 9.1% to a three-week low of £40.5/MWh. In contrast, most long-term contracts rose, as increased fears over Russian gas supplies managed to outweigh16-month low oil prices and record high GB gas supplies. Winter 14 gas rose 0.6% to 59.9p/th, while winter 14 power was up 0.5% to £51.3/MWh. In spreads, the annual October 14 clean dark spread gained 0.1% to reach £18.2/MWh, a new five-month high, as coal prices fell and power rose. Seasonal power and gas contracts rose despite bearish trends on the commodity markets. Brent crude oil fell below $100/bl for the first time since April 2013, averaging $99.0/bl, as low demand forecasts combined with record high supplies. EU ETS carbon prices also dropped, down 2.2% to average €6.1/t, as lack of progress surrounding reform negotiations continued to dampen market sentiment. API 2 coal prices hit an eight-week low of $77.7/t.
Written By Graham PaulGraham Paul