Energy Market Risk Analysis | early April 2013

Market reels after biggest spike yet

Prices on the short-term UK gas and power markets rocketed to new heights again on March 22nd, as gas imports through the main interconnector with Europe were cut off by a pump failure, exacerbating a supply squeeze caused by ongoing freezing conditions and storage concerns.
Day-ahead UK power rose to £82/MWh, its highest level since 2010, while Weekend prices hit £93/MWh, their highest level since 2008 (even as wind power production was reportedly reaching record highs).

 

 

Prices stay firm despite IUK repairs

Short-term prices roared to their biggest spikes of the winter so far on 22 March − with Day-ahead hitting 120 p/th and Within-day 150 p/th (its highest level since 2006) after imports through the main interconnector with Europe (the IUK pipe) were shut off due to a steam leak in a hot water system pump that heats the gas before it enters the UK network.
The pump was swiftly repaired and short term prices fell back soon after but they still remain elevated, supported by continuing cold weather and low levels of storage.

 

 

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Energy price shift between 17 March 2013 and 02 April 2013

Elec: +2.4%

Gas: -0.12%

Coal: -4.39%

Oil: +0.11%
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