Industry News

• Marketwatch

  26 Aug 2009

  JULY 2009

  
  In the week commencing 6th July, prompt gas prices were bullish at the start of the week due to sharp Norwegian cutbacks. Curve prices softened towards Friday due to oil. Gas for Q4 2009, winter 2009 and summer 2010 lost between 0.60 and 1.8 p/therm. Prompt power prices started favourably due to falling temperatures, and subsequent falling demand, and remained flat through to Friday. Curve prices took direction from the weakening oil price throughout the week. Brent lost ground again, finishing around $60/bbl, down from $64/bbl at the start of the week. In the week commencing 13th July, contracts continued to soften due to ample supplies. The sentiment continued throughout with winter 2009 closing just lower than the summer 2010 contract on 17th July. The October 2009 year ahead contract lost value by approximately 0.72 p/therm. For power in this week, Q4 2009 lost value by 0.84 £/MWh whilst summer 2010 gained by 0.30£/MWh. In the week commencing 24th July, near gas prices gained due to tight supply. Ahead and further out, gas markets bounced back somewhat. The prompt remained strong throughout the week and winter 2009 and beyond rose consecutively, day on day. For power, prices took direction from movements in gas and oil with a consecutive rise also seen in this market. Q4 2009 finished higher by 0.44 £/MWh whilst winter 2009 and summer 2010 increased by 0.15 and 0.75 £/MWh respectively. Finally, the last week of July saw near prices turn favourably at the end of the week following day-by-day gains at the start and middle of the week. The month ahead gas contract edged lower, down by 0.35 p/therm whilst Q4 2009, winter 2009 and summer 2010 fell between 0.95 and 1.10 p/therm.

  
  JUNE 2009

  
  The first week of June saw a comfortable system with the month ahead gas contract finishing around 26.5p/therm, almost 1p/therm lower compared to the start of the week. Q4 2009 and beyond on gas, however, edged up with the near winter contract alone finishing over 2p/therm higher. On power, further out, the gains seen mirrored those of gas with all seasonal contracts finishing higher. In the second week of June, a combination of oil falling and surplus gas pushed prices lower overall. Ahead, prices for winter 2009 fell for gas and power, just over 1p/therm and 0.6 £/MWh respectively. In the week commencing 15th June, prices continued to shed value at the beginning of the week thanks to ample supplies and weakening in oil. The first few days saw the July gas contract edge higher. However this contract finished largely unchanged at the end of the week. For power, the week started in a bearish mood despite a tight market in France with reduced nuclear capacity online. This mood continued throughout the week with the near season losing value slightly. In the penultimate week of June, prices across the spectrum continued on the downward path, with almost consecutive day-on-day falls. On gas, the month ahead (for July delivery) finished lower by 0.7p/therm and winter 2009 nearly 1p/therm lower. Prompt power contracts started bullishly whilst the curve fell in line with gas. Brent finished from around $67/bbl at the beginning of the week to just over $69/bbl at the end of it. Finally, in the last week, near gas prices rallied due to shortages of supply and maintenance issues. However, the October 2009 year ahead contract for gas finished approximately 3.4p/therm lower compared to the start of the last week of June. On power, further out there was some loss in values seen with the weakness in gas and an overall market sentiment that global economic recovery may be slow or even protracted.

  
  MAY 2009

  
  In the week commencing 4th May both the prompt and curve prices traded up. Maintenance work, particularly at Easington, led to the switching off of the Langeled pipeline. Despite this, systems coped well overall through to the end of the week. Ahead, seasonal contracts began bullishly at the beginning of the week due to a rise in carbon and coal and the strengthening of oil-led gas contracts. In the second week of May, supply was plentiful with the near term contract remaining static on the back of this, a little softer towards the end of the second week. Brent finished at $56/bbl resulting in some easing on prices further out, winter 2009 and beyond. In the week commencing 18th May, gas prices rallied early on due to a leakage incident in Norway’s largest processing plant. However, the markets normalised towards the end of the week after the plant came back on line. Q4 2009 and winter 2009, overall, lost value whilst summer 2010 gained on the back of oil. In the last week of the month, lower prompt prices were seen following an extremely bearish weekend and a well-supplied system. Ahead, particularly at the end of the week, the curve firmed on stronger oil. Winter 2009 and summer 2010 edged up at the beginning of the week with winter 2009 gas and power finishing around 46p/therm and 43.70 £/MWh respectively.

  
  Sources: Platts and Argus Media