Daily Energy Market Report Tuesday 6th Nov 18. Soft open on the NBP this morning because of losses in wider commodities. Oil, carbon and coal were down overnight, in turn driving the NBP downwards.
The curve has since lifted off the back of some strength in the Dec-18 EUA carbon contract.
Both carbon and coal are being driven downwards by relatively mild November weather forecasts and weak German power prices.
Decreasing Asian demand is also pushing coal lower, making coal a more attractive option for power generation.
However, the strength seen in carbon this morning could be as a result of short covering, with traders buying back to close off open positions, covering any risk to the upside.
Oil has also opened lower day on day on the back of Iran sanction exemptions.
These exemptions have come in the form of 180-day waivers that will allow eight of Iran’s biggest customers to continue purchasing oil.
There are also concerns surrounding a global economic slowdown, which is filtering into demand outlooks, easing concerns on the supply side.
Weather is also driving the prompt and near curve downwards with temperatures 3-5C above seasonal normal across Europe this week.
The 45-day forecast has also moved milder with increased confidence for the continent in comparison to the UK.
Significant cold is unlikely in the next 3 weeks.
The system is balanced at -1mcm with demand forecast at 214mcm, 16mcm below seasonal normal of 230 mcm.
LDZ demand is at 141.9mcm, with gas for power demand at 39.5mcm, a 28mcm decrease on yesterday with a pickup in wind generation.
Langeled has moved down 10mcm day on day to 60.8mcm because of a planned event at Visund taking 11.5mcm of capacity offline.
There are no unplanned events to note.
We are also injecting into storage at a rate of 11mcm.
Daily Energy Market Report Tuesday 6th Nov 18 brought to you by British Utilities