A backwardated market is when the front end (prompt) is higher in price than the back end of the curve. For example if Summer 06 is at £65/MWh and Summer 10 is at £45/MWh then the market is in backwardation. The opposite of backwardation is contango.
E.On CEO says electricity prices too cheap
Power prices likely to remain high read more...
24 December 2007
Power prices likely to remain high read more...
Contango Markets
The FT has written a good article on commodity contango. read more...
01 March 2007
The FT has written a good article on commodity contango. read more...
Summers and Winters not aligned.
The summer and winters are not behaving normally, but alot of this is due to prompt prices and not having to fill up storage in Summer 2007. read more...
01 February 2007
The summer and winters are not behaving normally, but alot of this is due to prompt prices and not having to fill up storage in Summer 2007. read more...
Summer Spreads
Summer 08 looks out of kilter in comparison to the rest of the curve in reality traders seem to see some value in SUmmer 08 which does not at face value appear to be anything other than greed. read more...
30 January 2007
Summer 08 looks out of kilter in comparison to the rest of the curve in reality traders seem to see some value in SUmmer 08 which does not at face value appear to be anything other than greed. read more...
Making sense of power prices.
Power prices have fallen in the past 3 months, 2009 is trading at a £5 discount to 2007, yet suppliers are increasing their tariffs and offering contracts to fix this year’s price for the next few years. Does it make sense? read more...
11 September 2006
Power prices have fallen in the past 3 months, 2009 is trading at a £5 discount to 2007, yet suppliers are increasing their tariffs and offering contracts to fix this year’s price for the next few years. Does it make sense? read more...
Is now a good time for a three or five year deal.
Five year deals may look attractive because the market is in backwardation but in reality there will be other opportunities as more detail on fuel fundamentals is released. No harm in hedging some exposure for five years but not all of it. read more...
05 May 2006
Five year deals may look attractive because the market is in backwardation but in reality there will be other opportunities as more detail on fuel fundamentals is released. No harm in hedging some exposure for five years but not all of it. read more...
Contango or Backwardation
The emissions market has not only collapsed it has also switched from being in backwardation to being in contango. read more...
02 May 2006
The emissions market has not only collapsed it has also switched from being in backwardation to being in contango. read more...
Long Term trading decisions
Long dated trading decisions lose focus as players concentrate on the prompt and settling Summer 06. read more...
13 February 2006
Long dated trading decisions lose focus as players concentrate on the prompt and settling Summer 06. read more...
Security of supply expected to dominate 2006
A year of investment and short term uncertaintity ahead of us. Customers have to be more bold at making decisions and placing bids in the market. This will give them confidence and the market liquidity and stability. This allows growth in options markets and allows the market to develop. read more...
04 January 2006
A year of investment and short term uncertaintity ahead of us. Customers have to be more bold at making decisions and placing bids in the market. This will give them confidence and the market liquidity and stability. This allows growth in options markets and allows the market to develop. read more...
Prompt sets stall for the future.
"Now is the winter of our discontent". Shakespeare summed up the traders feelings for Winter 2005. read more...
04 October 2005
"Now is the winter of our discontent". Shakespeare summed up the traders feelings for Winter 2005. read more...
The bearish sentiment continues
Oil is reacting to the Hurricane, by the time the effects reach a gas and power market it is just huff and puff. read more...
22 September 2005
Oil is reacting to the Hurricane, by the time the effects reach a gas and power market it is just huff and puff. read more...
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EdF enters the world of competition..
EdF has capitalised on competitive energy markets across Europe, not least in the UK, while at the same time enjoying a dominant, competition free, environment at home in France. It looks as though the EC has finally caught up with them... read more...
05 November 2009
EdF has capitalised on competitive energy markets across Europe, not least in the UK, while at the same time enjoying a dominant, competition free, environment at home in France. It looks as though the EC has finally caught up with them... read more...
Demand Led Economic Recovery?
What constitutes real demand is a question increasingly being asked, not least because it is viewed as a key indicator to signal the start of economic recovery. However a rise in demand may not necessarily mean a lift to the economy. read more...
09 October 2009
What constitutes real demand is a question increasingly being asked, not least because it is viewed as a key indicator to signal the start of economic recovery. However a rise in demand may not necessarily mean a lift to the economy. read more...
Market forgets basic principles and panics!
It could be said that the market over reacted today in the prompt market with a price rally on the back of a £142 half hourly cash out price. read more...
02 October 2009
It could be said that the market over reacted today in the prompt market with a price rally on the back of a £142 half hourly cash out price. read more...
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