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.
Phase I emissions prices are at €2.40 which equates to £1.49/MWh for coal and £0.64p for gas.
Phase II emissions prices are at €15.30 which equates to £9.47/MWh for coal and £4.11p for gas.
Summer 07 = £23.50/MWh Summer 08 = £31/MWh differential = £7.50. Emissions differential (Spark) = £3.53/MWh
Winter 07 = £34.50/MWh Winter 08 = £36.45/MWh differential = £1.95. Emissions differential (Spark) = £3.53/MWh.
This shows that the Summers are in contango front season lower than back season. The Winters on the other hand are in backwardation. As mentioned already Summer 08 does look over priced in comparison to other seasons, and much of this is because if Winter 07 is cold then storage will need to be replenished and this is not required in 07, where storage is virtually full.
02 May 2006
The emissions market has not only collapsed it has also switched from being in backwardation to being in contango. read more...
13 February 2006
Long dated trading decisions lose focus as players concentrate on the prompt and settling Summer 06. 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...
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...
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...
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...
Bearish Gas Market
The short system seen during the week provided little support in a bearish market. read more...
04 September 2009
The short system seen during the week provided little support in a bearish market. read more...
Should I buy long term power contracts?
With a market in contango, should the customer steer clear of long term contracts? Probably not.. read more...
14 August 2009
With a market in contango, should the customer steer clear of long term contracts? Probably not.. read more...
Summers Lack Shape
Oil price volatility, credit constraints and the Lehman collapse has all badly affected liquidity further out on the gas curve. read more...
27 October 2008
Oil price volatility, credit constraints and the Lehman collapse has all badly affected liquidity further out on the gas curve. read more...
Not a Single Record in Sight
Comfortable margins on the system as well as a Bank Holiday helped to minimise the gains recorded in the UK Power market on Friday. read more...
27 May 2008
Comfortable margins on the system as well as a Bank Holiday helped to minimise the gains recorded in the UK Power market on Friday. read more...
Q4 v Q1 Future (Gas)
Spreads sometimes show how markets can change, and this gas spread is an interesting one to analyse. read more...
04 February 2008
Spreads sometimes show how markets can change, and this gas spread is an interesting one to analyse. 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...
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