The market has responded to technicals and fundamentals specifically on fuel spreads.
The prompt has fallen this week mainly on demand. Both the US and the UK winter forecasts are for mild Winters. US gas stocks are at record highs and so oil prices have started to fall. Furthermore, UK power and gas prices continue to fall as players who have gone long in order to hedge against the unforseeable have off loaded length at the point of delivery. This would imply that the market is keeping its length and selling it at the point of delivery.
Sum & Win 07 have been slow to trade but when they have traded they have tended to be in the form of a fuel spread trade (i.e. Spark and Dark) The spark spread has collapsed with the fall in prices to £4-£6 many players believe that this is too low for incumbents to make money, and so they have being buying the spread (buy power sell gas/coal). Interestingly the reason why the spark spread has fallen is that the fall in gas relative to power has not been as aggressive. Arguably suggesting that the power market has been oversold and the gas market has continued to remain buoyant.
20 January 2006
March looks expensive, but the spark is keeping it high. Powerisk analyses this in further detail and suggests that there maybe opportunities to come in the near future. read more...
11 October 2005
Spark spreaders trading gas and power with small effect on the spread but influencing both markets quite dramatically with falls across the board. read more...
24 August 2005
Curve falls significantly, as the weather closes in there is a more bearish sentiment to price. read more...
07 March 2005
Mild weather forces drops which are tempered by a very bullish emissions price. read more...
Shale Gas - Latest UK estimates suggest enough for next 11 years
Cuadrilla Resources, the company at the forefront of Britain's Shale gas exploration released its first estimates of the amount of shale gas contained in the rocks of Lancashire. At 200 trillion cubic feet, the estimates are significant to say the least. read more...
22 September 2011
Cuadrilla Resources, the company at the forefront of Britain's Shale gas exploration released its first estimates of the amount of shale gas contained in the rocks of Lancashire. At 200 trillion cubic feet, the estimates are significant to say the least. read more...
Energy Forward Prices continue to gain ground
Despite market participants describing the market as stagnant and directionless, energy forward prices continue to gain ground. Winter 11 power closed the week up at £59.65/MWh while NBP Winter 11 gas finished at 72.20p/therm. read more...
10 June 2011
Despite market participants describing the market as stagnant and directionless, energy forward prices continue to gain ground. Winter 11 power closed the week up at £59.65/MWh while NBP Winter 11 gas finished at 72.20p/therm. read more...
Downward Trend Still in Play
Most contracts in the UK energy markets continued to lose ground this week enforcing the downward trend that has been in play since the start of the month. The Winter 11 contracts closed the week at £57.60MW/h and 68.85p/therm. read more...
13 May 2011
Most contracts in the UK energy markets continued to lose ground this week enforcing the downward trend that has been in play since the start of the month. The Winter 11 contracts closed the week at £57.60MW/h and 68.85p/therm. read more...
Winter 11 - A Slippery Slope
While March was a month of shocks and gains, April seems to have marked the start of a downward trend in the UK power market. The WInter 11 contract is just one example. read more...
06 May 2011
While March was a month of shocks and gains, April seems to have marked the start of a downward trend in the UK power market. The WInter 11 contract is just one example. 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...
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...
February Monthly Round Up
February was dominated by news of unrest spreading throughout the Middle East and this had a direct impact on all aspects of the UK energy market with gains seen in the UK Power and NBP Gas curves. read more...
25 February 2011
February was dominated by news of unrest spreading throughout the Middle East and this had a direct impact on all aspects of the UK energy market with gains seen in the UK Power and NBP Gas curves. read more...
Where has the market got left to go?
Clean spark spread prices in Winter’s 11 and 12 are trading below £5.00MWh (closing at £4.87 and £4.59 respectively). The equivalent Summer’s are not that much stronger asking some to ask is there anymore downside left at these levels. read more...
03 September 2010
Clean spark spread prices in Winter’s 11 and 12 are trading below £5.00MWh (closing at £4.87 and £4.59 respectively). The equivalent Summer’s are not that much stronger asking some to ask is there anymore downside left at these levels. read more...
Where's the certainty?
There was a time when you could quite comfortably forecast the running order of generation plant in the UK - but 2009 has seen a dramatic turn in the stack! read more...
23 December 2009
There was a time when you could quite comfortably forecast the running order of generation plant in the UK - but 2009 has seen a dramatic turn in the stack! read more...
Drax up against it
Drax profit margins fall as competition will only get harder. read more...
05 March 2008
Drax profit margins fall as competition will only get harder. read more...
Oil Disruption Fears create Volatile Markets
The European Union provided details this week of its proposed ban of Iranian oil imports as the Union steps up pressure over the country's nuclear programme. read more...
20 January 2012
The European Union provided details this week of its proposed ban of Iranian oil imports as the Union steps up pressure over the country's nuclear programme. read more...
Prepare for the clash of OPEC & IEA
With less than a month to go until OPEC meets, the statements are beginning to fly: OPEC believe the oil market looks balanced while the IEA again are saying that high oil prices could harm fragile global economic growth. Let the battle begin! read more...
23 November 2011
With less than a month to go until OPEC meets, the statements are beginning to fly: OPEC believe the oil market looks balanced while the IEA again are saying that high oil prices could harm fragile global economic growth. Let the battle begin! read more...
Markets Still Jittery
Most markets reported further losses today on the back of underlying nerves about the ability of both Europe and the US to repay their debts. Oil, commodities and equities all reported losses. read more...
21 November 2011
Most markets reported further losses today on the back of underlying nerves about the ability of both Europe and the US to repay their debts. Oil, commodities and equities all reported losses. read more...
Plunging Prices Impact UK Energy market
Oil markets were described as 'plunging' as fears escalated over the Greek debt crisis. With the dollar/euro exchange rates under pressure oil lost value pulling down NBP gas and UK power prices too. read more...
17 June 2011
Oil markets were described as 'plunging' as fears escalated over the Greek debt crisis. With the dollar/euro exchange rates under pressure oil lost value pulling down NBP gas and UK power prices too. read more...
Latest Figures Show the extent of Oil Shortfall
Despite increased OPEC production, output fell short of pre-Libya crisis levels. With little sign of a resolution in Libya, oil supply remains under pressure and with OPEC yet to cover the shortfall it seems that strong oil prices are here to stay (well for a while anyway). read more...
15 April 2011
Despite increased OPEC production, output fell short of pre-Libya crisis levels. With little sign of a resolution in Libya, oil supply remains under pressure and with OPEC yet to cover the shortfall it seems that strong oil prices are here to stay (well for a while anyway). read more...
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