Energy Market Risk Analysis | early June 2013

Gas Surge Breaks the lull

The relative lull seen in longer term prices since late April was shattered mid-June, as the announcement of major winter gas maintenance in Norway caused a surge in UK gas prices that fed through to a sudden 3% jump in Winter ’13 UK power prices, and propelled all Annuals higher.
Ahead of this prices had been edging lower, as coal prices continued to crumble and short-term levels also eased.  Short-term prices have been dragged down by falling demand, lower short-term gas prices and relatively high levels of wind generation, despite a significant portion of the nuclear

 

 

Annuals rear up on Troll outage plans

The announcement of plans for major Norwegian field maintenance this winter – understood to be related to upgrade work at Norway’s largest field, Troll – sent Annual gas prices rearing higher mid-June, following two mostly bearish weeks.
As Winter ’13 surged a sudden 3%, October ’13 Annual was driven higher by over 2%, to 68.7 p/th, with other Annuals and seasons also swept higher in the upswell, albeit by less. The field maintenance will reduce Norwegian output by 34 mcm/day between September 1 and April 1.

 

 

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Energy price shift between 03 June 2013 and 16 June 2013

Elec: +1.5%

Gas: +1.46%

Coal: -2.78%

Oil: +4.71%
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