August Market Summary

Transcription

1 August Markt Summary Rviw of Markt Trnds Rport No. 06 Martin Rawlings 9/2/2014 Contnts Macro Economics... 2 Europan Gas Markt NBP Pric: pnc/kwh... 5 UK Elctricity Markt Buy Pric: 40.25/MW... 6 Coal Buy Pric: 35.72/tonn... 8 Carbon Buy Pric: 6.39/tonn... 8 Nws... 9

2 Macro Economics GBP Closing Rat % Chang EUR % USD % Unitd Stats Dollar GBP/USD driftd lowr although it did spik to a high of as th London sssion finishd. It vntually fll to a low of vry lat in th month, but it stagd a rapid rcovry in Asia to opn Sptmbr at It s bn a whippy last fw sssions of trading compoundd somwhat by th fact it s a public holiday in th U.S. today and markts hav startd thinning out. US data rlasd was gnrally prtty strong with Chicago PMI th biggst rlas on th day printing bttr than markt forcasts at it was part of th rason why w saw cabl drift lowr. Th focus this month will b on UK PMI s, montary policy dcisions and U.S. Non-Farm Payrolls. It s a busy wk starting with UK Manufacturing PMI. Blizzard anticipats a rang of to Euro EUR/USD was thumpd lowr at month nd. Attntion was cntrd on Europan inflation data but it didn t rally surpris with th CPI Flash Estimat y/y printing at 0.3% (as xpctd). Th Europan unmploymnt rat was also rlasd and causd littl fuss, printing at 11.5%. Th pair fll to a low Pag 2

3 of in raction to th strongr than xpctd US data as wll as r-positioning ahad of th long wknd in th U.S. Manwhil th Russia/Ukrain situation continus to wigh on sntimnt. Thr s also growing and loudr calls for th ECB to act officials mt to dcid on montary policy. According to a rport from Rutrs, Bnoit Cour, an ECB official said that th cntral bank was rady to adjust policy and provid additional liquidity to banks if ndd. Draghi s rcnt commnts at Jackson Hol add wight to th argumnt that th bank will do somthing too. EUR/USD vntually fll to a low of arly this morning but has rcovrd a littl to opn at Blizzard anticipats a rang of to Oil Markt: Brnt $102.49/bbl, WTI $94.55/bbl Brnt ICE (USD/b) Gasoil ICE (USD/t) Ful 1% Fob cg (USD/t) CRUDE OIL SPOT PRICE $ p r B a r r l Brnt WTI Dat Pag 3

4 Clos to clos: UP at $ /bbl for Brnt ICE SEP 14 Why? Markts wr quit ystrday during th labour day holiday in US (vry low tradd volums) and Brnt postd small 40 cnts losss to com back blow $102.8/b. Oprators wr, looking at Ukrain, Iraq and Libya whr situations can chang suddnly any tim but thy kpt a cool had and sm to b taking a wait-and-s stanc bfor making any dcision. Th slowing oil dmand growth du to wak conomic rcovris in China and Europ was th othr issu of th day. Main vnts: Libyan output rmains high at 700 kbd (compard to 155 kbd in May) dspit rnwd fighting ongoing in Tripoli. Ystrday, th govrnmnt said it has lost control of most ministris and stat institutions locatd in Tripoli to rival armd groups. in Iraq, oil xports fll in August to Mbd, according to official data rlasd ystrday. This slight drop is mainly du to bad wathr as th oil complx rmains ovrall unaffctd by th Islamic insurgncy. Production of British Buzzard oilfild has stoppd again aftr rturning from maintnanc last wk. Buzzard is th biggst contributor to th Fortis oil stram, on of th four bnchmark cruds usd for th Brnt. Outlook: About Ukrain, talks ar ovr in Minsk, in a tns climat as Moscow still dnis any ground intrvntion and ask for an immdiat cas-fir whil Ukrain claim to b fighting with rgular Russian troops in its astrn trritoris. Thr is no ral dirction in th markt yt and tradrs ar waiting for vnts or figurs to giv thm clus about nxt trnd for crud. $100/b is a floor at th momnt but upsid is also limitd in this tim of uncrtainty. Pag 4

5 02/01/ /02/ /03/ /04/ /05/ /06/ /07/ /08/ /09/ /10/ /11/ /12/ /01/ /02/ /03/ /04/ /05/ /06/ /07/ /08/ /09/ /10/ /11/ /12/2014 UK Enrgy Markts Rport Europan Gas Markt NBP Pric: pnc/kwh Day Ahad (p/thrm) Spt 2014 (p/thrm) Summr 2015 (p/thrm) P n c / T65.00 h r55.00 m Day Ahad Summr 12 Wintr 12 Summr 13 Wintr 13 Summr 14 Wintr 14 Summr 15 Wintr 15 Summr Wintr 16 Summr 17 Wintr 17 Summr 18 Wintr 18 Volatil dspit long systm Sptmbr gas opnd 14mcm long, with supply at parity with August lvls but dmand down on lowr CCGT consumption following th rturn of som coal fird gnration from maintnanc and strongr prics on th NBP. Dmand was also wighd on by a downturn in xports to th continnt following th rturn of th Emdn trminal from maintnanc, although this was offst by a drop in imports through Langld. Dspit th long systm prompt prics tickd up, taking lad from strong momntum on th nar curv. Prics asd off amid volatil trading, with intra-month sprads widning nough to ncourag injctions into storag. Th systm is currntly 5mcm long with dmand forcast at 168mcm. LNG snd-outs from South Hook hav droppd, currntly flowing at undr 25mcm/day, following dclining lvls of supply from Pag 5

6 th facility ovr rcnt wks. LDZ consumption is also prdictd highr dspit warmr tmpraturs, with CCGT gnration also nominatd highr. Th compltion of maintnanc works on th FLAGS piplin hav sn a ramp up in Norwgian imports dspit lowr xpctd flows through Langld. This is joind by th rturn of imports through BBL, currntly nominatd at 5mcm but much highr currnt flows indicating ths could incras as th month progrsss. Dspit comfortabl intra-day supplis, prompt prics hav gappd up on th back of plannd maintnanc at Easington and platforms in th North Sa. Th drop in LNG snd-outs also rmovd som confidnc in swing supplis ovr th coming wks, though mildr forcast tmpraturs could limit this somwhat. Furthr out on th curv, prics continu to mak gains though th movs hav bn lss markd. An as yt lack of significant dvlopmnts could s som risk prmium b rmovd form contracts addd in prior to th wknd. UK Elctricity Markt Buy Pric: 40.25/MW Day Ahad (p/kwh) Wk (p/kwh) Octobr 14 (p/kwh) Novmbr14 (p/kwh) Q (p/kwh) Wintr 2014 (p/kwh) Summr 2015 (p/kwh) Wintr 2015 (p/kwh) Summr 2016 (p/kwh) Wintr 2016 (p/kwh) Som of th risk prmium built up on th curv ovr th month, droppd out of th markt at th start of Sptmbr. Political dvlopmnts in th Ukrain saw prics across th UK powr curv clos th month at nw highs. Uncrtainty ovr th rturn dat of svral nuclar plants to th grid providd additional strngth to contracts closr in on th curv. Prompt contracts wr prdominantly bullish, firming alongsid thir gas countrparts. An incras in forcastd dmand for Sptmbr providd furthr sntimnt for th Wk-Ahad contract. APX Powr UK Spot Valu Chang Bas 29, MWh /MWh +21.7% % Industrial Pak 15,826 MWh /MWh +48.9% % Total 1,539 Trads +5.6% Pag 6

7 UK OTC POWER PRICE MOVEMENTS P n c / k W h Day Ahad Summr 2014 Wintr 2014 Summr 2015 Wintr 2015 Summr 2016 Wintr 2016 Summr 2017 Pag 7

8 Coal Buy Pric: 35.72/tonn Units Spt 14 Q4 14 Q1 15 Q2 15 Q3 15 Coal API 2 USD/MT Coal API 4 USD/MT Carbon Buy Pric: 6.39/tonn Pag 8

9 Nws UK grid asks for additional capacity to fill probabl wintr supply gap Britain s powr ntwork oprator National Grid has submittd by a yar a plan to tap supplmntary lctricity capacity ovr th wintr aftr a numbr of unprdictd plant outags Russia and Ukrain sttl on gas ngotiations on Sptmbr 6 Russia's Enrgy Ministr Alxandr Novak dclard on Monday that Moscow and Kiv hav dcidd to hold a nw round of ngotiations to rsolv a gas crisis on Sptmbr 6. Nordic spot powr prics hav incrasd on lowr wind lctricity production Brnt crud rmaind stabl blow $103 a barrl on Tusday, with a nw conflict in OPEC oil producr Libya balancd by worris of slowing oil dmand incras bcaus of wak conomic improvmnts in China and Europ. Gazprom starts construction of th mga-piplin to China Prsidnt Vladimir Putin suprvisd on Monday th bginning of construction on a giant piplin that is likly to convy Russian gas to China of about $400 billion in th thr dcads aftr flows start in Statoil: 75% of gas sold to Europ at spot prics Norway's Statoil, Europ's scond major gas supplir, currntly vnds approximatly 75% of its gas at spot prics, in a budg from oil-rlatd prics that has aidd it obtain markt shar but strik profits this yar, as statd by its gas trading manag. National Grid: Elctricity prics could doubl within 20 yars Elctricity prics could doubl by 2035, whil gas prics might incras by 43%, according to forcasts rlasd by th National Grid. EDF to halt four nuclar ractors in northrn England EDF Enrgy will shut down tmporarily four nuclar ractors at two larg powr plants in th north of England aftr a tchnical issu was found in boilr units. Daily: Europan coal prics soar on nuclar and gas production outag Brnt crud slippd on Monday dspit many gopolitical risks including U.S. air strik in Iraq, whil U.S. crud incrasd on xpctations of a draw in U.S. invntoris. Brnt crud droppd 34 cnts to sttl at $ a barrl, whil WTI crud ros 43 cnts to clos at $98.08 a barrl. Pag 9

10 Trminology All oil prics: in US dollar Oil product: Brnt crud or Wst Txas Intrmdiary (WTI) Mb/d Million Barrls pr day. Fright rats: US dollar pr tonn. Natural gas prics quotd as pnc pr thrm. Powr prics quotd as Pounds Strling pr MWh. CO2 markt: EURO Information & Data Sourcs 1. APX UK 2. Total Gas & Powr 3. GdF Suz 4. Europan Enrgy Exchang (EEX) 5. Coal spot.com 6. Europan Carbon Futurs 7. FT 8. Enrgymarktpric Disclaimr This matrial is intndd for information purposs only. It dos not constitut an indpndnt invstmnt rsarch, a prsonal rcommndation or othr gnral rcommndation rlating to transactions in financial instrumnts or an invstmnt advic. This matrial is intndd for gnral distribution, it dos not tak into account any spcific invstmnt objctivs, financial situation or particular nds of any rcipint. It cannot b transmittd to any othr prson without th prior writtn consnt of Blizzard Utilitis Limitd. Th information containd hrin, including any xprssion of opinion, is not intndd to constitut an offr or a solicitation to buy or sll any financial instrumnts, products or srvics, an invstmnt rsarch or an invstmnt rcommndation or othr financial, invstmnt, lgal, tax or accounting advic or any othr advic. Furthr, all information containd hrin has bn obtaind from and/or is basd upon sourcs blivd to b rliabl is dmd to b clar, fair and not mislading but cannot b guarantd as to accuracy or compltnss. Th viws and opinions, forcasts, assumptions, stimats and targt prics rflctd in this matrial ar as of th dat indicatd and ar subjct to chang at any tim without prior notic. Th figurs that may rfr to past prformanc hrin ar in no instanc an indication of futur valuations or futur prformanc. Blizzard Utilitis Limitd is undr no obligation to disclos or to tak account of this documnt whn advising or daling with or for its customrs. Blizzard Utilitis Limitd nor any of its affiliats, dirctors, mploys, agnts or advisrs nor any othr prson accpt any liability to anyon for any dirct, indirct, spcial, incidntal, consquntial, punitiv or xmplary damags (including, but not limitd to, lost profits) arising from th us and dissmination of this matrial or th information containd hrin. Pag 10

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