The short term facts suggest that the market had to go higher, but this does not mean that we should see the back end of the curve rise inexorably as well. Some sellers are keeping a cap on the backend of the curve but the buyers also have to be disciplined.
August trades at £42.50.
Day Ahead at £63 (this is for Tuesday and is £10 up from the day ahead price for Monday)
Winter 06 although not traded is bid at £61.25.
Summer 07 is bid at £43.70 and offered at £45.
All of this rise is due to outages in power plant and in gas fields, all occuring at a time when we are having a heatwave (more air conditioning) and the start of World War Three appears to be happening in the middle east. All whilst the G8 are having a small holiday in Russia and playing politics with each other.
Given this backdrop, it is amazing that prices have not risen higher. The important things to learn from this are that all of these factors are very short term. It is very much hoped that diplomacy will force the Middle East to behave, this will lead to a reduction in oil prices, and more gas and power plant will eventually return from outage, this will see a degree of normalcy return to the market.
17 February 2005
Prompt up- better to be long and wrong, than short and caught. read more...
25 January 2005
Winter 05 continues its bull run, hitting a two month high of £37.10. read more...
Oil price reaches record high
Oil price continue to climb spooking most markets. read more...
04 March 2008
Oil price continue to climb spooking most markets. read more...
Oil prices continue to spook markets
Oil prices influencing gas and power along the curve. read more...
11 February 2008
Oil prices influencing gas and power along the curve. read more...
Fear factors and risk premia
Risk premia and fear will always effect markets one study suggests that $20 + is the risk premia in oil and whilst one doubts it as high in power and gas it is there. What is clear is that as the market stabilises, confidence grows and the risk premias fall. read more...
16 August 2006
Risk premia and fear will always effect markets one study suggests that $20 + is the risk premia in oil and whilst one doubts it as high in power and gas it is there. What is clear is that as the market stabilises, confidence grows and the risk premias fall. read more...
Prompt stronger, but curve softer
Market ticking along waiting for fresh news, but what news that is out there is causing players to hold the length at the fornt and sell the backend. read more...
07 August 2006
Market ticking along waiting for fresh news, but what news that is out there is causing players to hold the length at the fornt and sell the backend. read more...
Market Marginally down
Oil fears continue to drive the market but both gas and power are reacting well to the various demands, and although ticking up are doing so in a controlled and rational way (not always the case in the past!) read more...
14 July 2006
Oil fears continue to drive the market but both gas and power are reacting well to the various demands, and although ticking up are doing so in a controlled and rational way (not always the case in the past!) read more...
What's in the Mix?
While gains may have been seen in both the power and gas markets this week – the gains were not equal causing a big shift in the generation mix read more...
24 September 2010
While gains may have been seen in both the power and gas markets this week – the gains were not equal causing a big shift in the generation mix read more...
Out with the Old, In with the New
During the last day of trading in 2009, the UK Power curve closes down but what will the New Year hold in store? read more...
31 December 2009
During the last day of trading in 2009, the UK Power curve closes down but what will the New Year hold in store? read more...
Unseasonal Temperatures help to melt prices
Middle of November but no sign of wintery temperatures. The effect was to soften the prompt power market, which also felt the pressure from weak commodity curves. The downward trend fed through the power curve. read more...
16 November 2009
Middle of November but no sign of wintery temperatures. The effect was to soften the prompt power market, which also felt the pressure from weak commodity curves. The downward trend fed through the power curve. 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...
What's Happening in the Back-End?
The back end of the curve is extremely difficult to trade. Those dipping their toe in tend to be Producers (with excessive length adjusting their risk positions) and Banks looking for some exposure. At the same time Retailers tend to be short-termist. read more...
19 June 2009
The back end of the curve is extremely difficult to trade. Those dipping their toe in tend to be Producers (with excessive length adjusting their risk positions) and Banks looking for some exposure. At the same time Retailers tend to be short-termist. read more...
Monthly Review - Jan 2012
Weather, oil sanctions and European debt concerns were the pushers and pullers this month as energy markets responded to competing indicators. Volatility was the only constant. read more...
01 February 2012
Weather, oil sanctions and European debt concerns were the pushers and pullers this month as energy markets responded to competing indicators. Volatility was the only constant. read more...
Weather Forecasts and Iranian Threats
Forecast and outturn cold weather drove gas and coal prices this week which in turn had an impact on the power curve. Iran threatened to cut off crude supplies ahead of the EU's proposed July sanctions; a move that would impact EU nations as they seek to find alternative sources ahead of the import ban. read more...
27 January 2012
Forecast and outturn cold weather drove gas and coal prices this week which in turn had an impact on the power curve. Iran threatened to cut off crude supplies ahead of the EU's proposed July sanctions; a move that would impact EU nations as they seek to find alternative sources ahead of the import ban. read more...
Warm weather weighs heavy on prices
Unseasonably warm weather and European debt crisis fears continued to influence the markets at the start of 2012. While oil did open the year up on the back of strong economic data from both the US and China, it retraced its steps on surprise US stockpile data combined with the Euro debt fears. read more...
06 January 2012
Unseasonably warm weather and European debt crisis fears continued to influence the markets at the start of 2012. While oil did open the year up on the back of strong economic data from both the US and China, it retraced its steps on surprise US stockpile data combined with the Euro debt fears. read more...
The Market in April 2011
In comparison to the activity seen in March – the energy markets seemed relatively sedate shedding some of the value along the way. read more...
28 April 2011
In comparison to the activity seen in March – the energy markets seemed relatively sedate shedding some of the value along the way. read more...
Confidence Returns to Market
Despite a continuation of cold conditions, confidence was seen returning to the market with a stabilisation of spot prices and comfortable system margins. There was some focus on the curve with seasonal contracts all reporting some gain on the previous weeks levels apart form Summer 13. read more...
20 December 2010
Despite a continuation of cold conditions, confidence was seen returning to the market with a stabilisation of spot prices and comfortable system margins. There was some focus on the curve with seasonal contracts all reporting some gain on the previous weeks levels apart form Summer 13. read more...
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