Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 18th July 2014
Power and gas contracts reversed recent downward trends this week, as escalating tensions in Ukraine sparked security of supply fears for European markets. The NBP gas market was bullish, with day-ahead gas surging 10.2% to reach a three-week high of 38.3p/th. Along the curve, fears for supplies pushed winter 14 gas 7.4% higher to 59.0p/th. Power prices followed these sharp rises, with gas continuing to dominate electricity generation, averaging 46% for the week. The annual October 14 power contract rose 5.2% to £48.9/MWh as a result. Rising power prices aided spreads, as the annual October 14 clean dark spread gained 13.2% to reach £17.5/MWh, its highest level in a month. In contrast to trends in the GB market, commodity prices were lower this week. Brent crude oil was down 1.8% to $107.0/bl as Libyan and Iraqi exports continued to increase, while API 2 coal prices suffered a seventh straight week of losses, dropping to a new four-year low of $77.3/t in the process.
Written By Graham PaulGraham Paul