Energy Market Risk Analysis | mid April 2013

Carbon crash has little impact

UK power prices have fallen sharply over the last two weeks, reflecting a return to temperatures that are in line with seasonable norms and an improved gas supply outlook.
A crash in the value of EUAs (EU carbon allowances that are factored in to power prices) on April 16th – following a European Parliament vote to reject the European Commission’s “backloading” proposal (to boost carbon prices by withholding allowances from the market) – had only a slight bearish effect on UK electricity values, however.
2013 EUA prices crumbled by as much as 45% just after the news of the vote broke.

 

 

Prices slide as Spring arrives

“Normal service has resumed” one market commentator declared, in reference to the way gas prices are now generally back to where they were in mid-February, before the series of late Winter price spikes started and shook the market.
Prices for next day delivery and October ’13 Annual are both around 68 p/th, the former just below it and the latter just above it, as short and longer term prices have all retreated.
Longer term prices have been weighed down in part by a tumble in the oil market, with North Sea oil falling below $100/barrel.

 

 

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Energy price shift between 02 April 2013 and 18 April 2013

Elec: %

Gas: %

Coal: +1.49%

Oil: -10.14%
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