Energy Market Risk Analysis | Early July 2017

Short-term doubles; annuals steady

Almost all of the price volatility has again been in the short-term market over the last fortnight, with Day-ahead prices doubling as they leapt from a 9-month low to a 5-month high – on the back of a cluster of powers stations going offline and a sharp drop in wind output just as the heatwave hit its peak and ramped up cooling demand – before pulling lower again. Longer term prices have been torpid by comparison, shuffling marginally up and down.

Calm reaction to Rough closure

The news that the UK’s largest gas storage facility, Rough – which accounts for around 70% of UK gas storage capacity – is to close permanently, had a very limited effect on the market. This is largely because the site is currently in a long-term outage and had suffered so many operational issues over the last few years that many had already written it off.

Energy price shift between 04 June 2017 and 05 July 2017

Elec: +1.91%

Gas: +0.33%

Coal: +4.7%

Oil: -7.2%

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