Energy Market Risk Analysis | late June 2013

Carbon fix vote offers slight support

Prices have been on a downward trend for much of the past fortnight, as reduced heating demand in the face of warmer weather pulled short-term prices lower while long-term prices slipped back on weaker oil prices and as fears of reduced Norwegian gas supplies this winter subsided. However prices have since started to creep higher again over the last few days, with a drop in temperatures, summer maintenance work and Middle East tensions all contributing. A vote by the European Parliament on July 3rd in favour of an amended carbon market “fix” – withdrawing some EUAs from the market

 

 

Day-ahead slumps then surges rebound

While the third week of June was bearish for short and longer term gas prices, levels were soon rebounding in the fourth week, with Day-ahead jumping by 20%, or 11 p/th, and Annuals rising by a much more modest 1%.
The surge in short-term prices followed a slump which saw Day-ahead trade at a 10-month low of 53.55 p/th, due to a combination of warmer weather suppressing demand, healthy LNG and Norwegian gas imports and a lack of exports while the interconnector to Belgium remained closed for annual maintenance.

 

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Energy price shift between 16 June 2013 and 02 July 2013

Elec: -1.17%

Gas: -0.59%

Coal: -0.87%

Oil: -2.4%

 

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