Nena News

NORDIC – Forwards extend losses as fuels weaken

(Montel) Nordic power forward prices extended earlier losses on Tuesday afternoon as wet weather forecasts were met with weakening fuel prices.

The July contract last traded at an 11-day low of EUR 22.50, down EUR 1.10, on the Nasdaq Commodities exchange.

The front quarter contract was seen down EUR 1.05 to EUR 23.05/MWh, while the front year last changed hands at EUR 23/MWh, down EUR 0.85.

“Inputs are very bearish today. The weather forecast are wet, especially the EC model, and we also see the coal price sliding,” said analyst Sigbjørn Seland at Nena.

The Cal 17 API 2 coal contract last traded at USD 55.75/t, down USD 3.03 on the day on Ice Futures, after hitting an almost one year-high of USD 59.50 in the previous session.

In the carbon market, the Dec 16 EUA contract was off EUR 0.28 at EUR 5.58/t, a two-month low.

Wet outlook
Different weather forecast indicate 5.9-11.9 TWh of potential hydropower production from rain in Norway and Sweden over the next 10 days, compared to a norm of 5.7 TWh, according to SMHI.

However, the system price for Wednesday settled at EUR 28.17/MWh, up EUR 0.39 from the prior day’s settlement, and in line with expectations of an expected day-on-day drop in wind power generation.

The system price has averaged at EUR 27.84/MWh so far this week. This compared with the front week contract which last traded at EUR 25.50/MWh, down EUR 0.50 on the day.

Still, Seland expects spot prices in the coming weeks to be weighed down by a combination of rising nuclear generation, more hydropower inflow and less demand over the summer holiday season.

Gert Ove Mollestad
15:17, Tuesday, 21 June 2016