Energy Market Risk Analysis | Early June 2017

Rally extends, then falters

Annual UK power prices continued to rebound for most of the second half of May, pushing towards three-month highs before pulling back at the very end of the month, in line with other energy markets, while short-term prices have come under pressure from an increase in renewables output and the end of several outages.

 

A tale of two markets

It’s been a tale of two distinct UK gas markets over the last fortnight ─ with the forward market rising while the short-term market has shunted sharply lower.
Annuals and other longer-term periods have been boosted by the Dutch government confirming a 10% cut in output at the giant Groningen field from October, UK winter storage jitters and some more selective attention to the oil market, while short-term levels have been knocked lower by warm weather denting end-user demand, windier weather denting generator demand and healthy supplies.

 

Energy price shift between 16 May 2017 and 04 June 2017

Elec: +1.62%

Gas: +1.83%

Coal: +3.99%

Oil: -1.15%

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