Correlation breakdown or correction

10 May 2005

Spark spread rises in line with market norm.

Gas prices in Winter 05 moved to a life high of 59p/therm, on this bullish activity one would expect the power price to have risen too. However, with low liquidity it remained at current levels (£45.60/MWh). Powerisk suggests that this is a correction in the spark spread which has been trading at below £5 for some time but with the gas price rising it is up to £5.68.


Bull Market  Spread  Winter  Risk Management 

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