Energy Market Report February 4, 2013 Week 6 Highlights International commodities were quite affected by the weakening Dollar over the course of last week: oil was up more than 3.50$/b and coal 0,25$/t. For the more local commodities, gas was down on milder weather conditions and power on comfortable production figures and lowered fuel costs on the curve. The only rebound came from the emissions, after news that German renewable schemes would get stricter, moving emissions away from the 3 /t area for some time. Overview Highlights p.1 European Power Spot Prices p.2 European Power Forward Prices p.3 European Gas Prices p.5 Carbon Market Prices p.6 Oil Market Prices p.7 Coal Market Prices p.8 Weather Overview p.9 Exchange Rates p.10 Indices Overview p.11 COMMODITIES Week 04 VS Week 05 ELECTRICITY GAS CO2 OIL COAL WEATHER EXCHANGE RATE SPOT SPOT SPOT SPOT + SPOT + OBSERVED + SPOT EUR/GBP + SPOT EUR/USD + - 1 -
European Power Spot Prices Spot prices significantly dropped compared to last week most certainly inspired by the mild temperature conditions. Belpex Settlement last 2 weeks Quote Week 04 Quote Week 05 Delta Base 56.91 48.36-15.03% Off-peak 8-20h 50.68 42.88-15.40% Peak 8-20h 68.13 58.23-14.54% Belpex DAH Power Hourly Prices Week 04 2013 Week 05 2013 104 94 84 74 64 54 44 34 24 Mon Tue Wed Thu Fri Sat Sun 70 60 50 40 30 20 10 0 Belpex Monthly Average Prices 2012 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec History of Baseload Weekly Average on DAH Prices Belpex Apx Powernext Eex 55 45 35 25 15 5-5 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 3 Months History of Weekly Average Spread BE-FR&BE-NL on DAH Prices Belpex-Powernext Belpex-Apx 20 15 10 5 0-5 -10 Oct-12 Nov-12 Dec-12 Jan-13-2 -
European Power Forward Prices Belgium Overview Curve prices were again down last week, partly driven by weakening fuel prices affecting marginal costs and partly driven by the bearish move on the spot markets. However, the rebound on emissions after Angela Merkel's speech pushed German Cal14 back to 41 area against its low at 40.37 on Thursday. In Belgium some bullish news came from Electrabel's announcement that further tests would be conducted on Doel3 and Tihange 2, postponing the estimated recommissioning to March. Endex Base BE : Average Quotes last 2 weeks Quote Week 04 Quote Week 05 Delta Feb-2013 53.86 53.27-1.09% Mar-2013 47.85 47.23-1.30% Apr-2013 43.53 43.37-0.36% Q2-2013 40.54 40.22-0.78% Q3-2013 39.33 39.08-0.62% Q4-2013 50.47 50.07-0.79% Q1-2014 51.12 50.50-1.22% Cal-2014 44.36 43.88-1.10% Cal-2015 44.49 43.79-1.58% Cal-2016 45.50 44.69-1.78% History of Endex BE Power Base Y+1 2013 2012 2011 60 55 50 45 40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec History of Endex Power BE Yearly Futures Cal 2014 Cal 2015 Cal 2016 54 52 50 48 46 44 42-3 -
European Power Forward Prices BENEDEFR Overview History of Neighboring Countries Baseload Power Y+1 Endex Belgium Endex Holland Platts Germany EEX France 55 50 45 40 3 Months History of Baseload Power Spread BE-FR & BE-NL Y+1 Endex BE-EEX FR Endex BE-Endex NL 4 3 2 1 0-1 -2-3 -4 Nov-12 Dec-12 Jan-13 Feb-13-4 -
European Gas Prices Mild weather conditions pushed NWE gas prices strongly down over the course of last week, mainly on the spot market, but also on the curve. However, because Asian markets continue to price high on LNG cargoes and the Troll platform unavailibility limits Norwegian flows by around 30m³/day, the drop was limited on the curve, which was already quite low against historical levels. Gas Zeebrugge : Average Quotes last 2 weeks Quote Week 04 Quote Week 05 Delta Feb-2013 26.21 25.87-1.31% Mar-2013 25.97 25.89-0.32% Apr-2013 25.66 25.69 0.13% Q2-2013 25.55 25.48-0.26% Q3-2013 25.45 25.39-0.21% Q4-2013 27.32 27.03-1.07% Q1-2014 28.54 28.08-1.61% Q2-2014 26.13 26.00-0.51% Q3-2014 26.13 26.00-0.51% Cal-2014 27.14 26.87-1.00% 29 History of ZIG DAH Prices 30 History of Zig Monthly Average 2012 2013 28 25 27 20 26 25 24 23 22 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 15 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec History of NBP, Zeebrugge, TTF Y +1 3 Months History of Spread Y+1 NBP Zeebrugge TTF NBP-ZEE TTF-ZEE 29 28 27 26 25 Aug-12 Oct-12 Dec-12 Feb-13 0.2 0.1 0.0-0.1-0.2-0.3-0.4-0.5-0.6-0.7 Nov-12 Dec-12 Jan-13 Feb-13-5 -
/t /t Carbon Market Prices The downward trend in carbon prices continued last week. The Dec/13 contract traded below 4 /t most of the week. Only on Friday a rebound in prices was seen after the support of German Chancellor Angela Merkel to the German Environment Minister s plan to cap renewable subsidies to limit the rise in power prices for consumers. The Dec/13 contract ended the week at 4.34 /t. CO2 EUA : Average Quotes last 2 weeks /t Quote Week 04 Quote Week 05 delta Cal-2013 4.73 3.94-16.72% Cal-2014 4.96 4.15-16.30% Cal-2015 5.19 4.32-16.70% Cal-2016 5.45 4.55-16.59% History of Point Carbon CO2 EUA Emission Yearly Futures Cal 2013 Cal 2014 11.0 9.0 7.0 5.0 3.0 3 Months History of Spread EUA-CER in 2013 7.5 6.5 5.5 4.5 3.5 2.5 Nov-12 Dec-12 Jan-13 Feb-13-6 -
$\bbl $/t Oil Market Prices The weakening Dollar was a major driver of oil prices last week, since globally, most news should have pushed prices somewhat down: EIA oil stocks at their highest levels and OPEC production compressed to its lowest output (mainly coming from an increased effort on Saudi Arabia). But indeed, oil prices started gaining some premium coming from tighter gasoline conditions in the US and upcoming sanctions on Iranian oil exports. GOL 0.1% s : Average Quotes last 2 weeks $/t Quote Week 04 Quote Week 05 Delta Cal-14 898.31 909.81 1.28% Cal-15 882.85 891.30 0.96% Brent : Average Quotes last 2 weeks $/BBL Quote Week 04 Quote Week 05 Delta Cal-14 103.13 104.66 1.47% Cal-15 98.36 99.08 0.73% Cal-16 94.65 94.96 0.32% HFO : Average Quotes last 2 weeks $/t Quote Week 04 Quote Week 05 Delta Feb-2013 646.90 652.25 0.83% Mar-2013 646.65 656.90 1.59% Apr-2013 646.50 656.30 1.52% May-2013 645.55 655.60 1.56% Q2-2013 645.45 655.25 1.52% Q3-2013 640.80 650.95 1.58% Q4-2013 631.85 642.75 1.73% Q1-2014 627.30 635.95 1.38% Cal-2014 620.95 626.70 0.93% History of Settlement Oil Products Prices (Platts) HFO GOL 0.1% S 1050 950 850 750 650 550 History of Brent First Nearby Month Forward prices 130 125 120 115 110 105 100 95 90 85-7 -
$/t $/t Coal Market Prices Spot coal prices were strongly affected last week from quite a few loadings being notified Force Majeure in Australian ports due to severe weather conditions. But since globally, ARA and Chinese stock levels have significantly increased over the week, the bullish move was limited. Globally, markets signals still carry some clear indication that supply is structurally abundant, meaning that a large part of the coal rise over last week came from the weakening Dollar, as for oil. Coal : Average Quotes last 2 weeks $/t Quote Week 04 Quote Week 05 Delta Jan-2013 86.20 86.20 0.00% Feb-2013 86.82 86.82 0.00% Q1-2013 86.97 87.70 0.84% Q2-2013 89.69 90.58 0.99% Q3-2013 91.75 92.68 1.01% Q4-2013 94.27 95.20 0.99% Q1-2014 96.64 97.59 0.98% Cal-2013 90.67 91.95 1.41% Cal-2014 99.16 100.35 1.20% Cal-2015 105.89 106.94 0.99% History of Settlement Weekly Index (Argus McCloskey ) 110 105 100 95 90 85 80 History of Coal Yearly Futures Cal 2014 Cal 2015 130 125 120 115 110 105 100 95-8 -
0 = No cloud - 8 = Fully Cloud m / s Degrees Celsius Weather Overview Temperatures are expected to fall from 3C to 5C below average by Days 6 to 10 in a cold Northwesterly airflow. Then they will rise to between 1C and 3C below average for Days 11 to 15 as low pressure becomes dominant in the North Atlantic and introduces a more South-westerly airflow. Precipitation totals are expected to be generally around average within the short term. Winds are expected to be around 30km/h at first, with a high probability of high power generation, but fall to around 10km/h by midweek. Weather overview Week 04 Week 05 Delta Cloud Coverage Level 5.00 5.00 0.00 Temperature c -2.20 6.80 9.00 Windspeed m/s 6.60 11.10 4.50 Hourly Average Temperature Observed Week 04 Observed Week 05 Avg week 06 (2010-2012) Forecast Week 6 10 5 0-5 -10 00:00 06:00 12:00 18:00 Hourly Average Observed Cloud Coverage Week 04 Week 05 Hourly Average Observed Wind Speed Week 04 Week 05 8 7 6 5 14 12 10 4 3 2 00:00 06:00 12:00 18:00 8 6 4 00:00 06:00 12:00 18:00-9 -
/ / $ / / $ Exchange Rates EUR/USD continued to rally and shows no signs of stalling. This situation is rather supported by a weak USD story rather than a strong EUR story. US FOMC statement of last week tended to paint weak Q4-12 growth as distorted by weather and transitory factors, the Fed still got across its core message that aggressive QE remains in place and it is prepared to do more if the unemployment rate does not fall quickly enough. Treasury yields edged lower on the news and the prospect for US$85bn per month of Fed QE for the first half of the year should keep the dollar soft. Exchange Rates : Average Quotes last 2 weeks Week 04 Week 05 Delta EUR/GBP 0.8429 0.8570 1.67% EUR/USD 1.3358 1.3522 1.23% History of Settlement EUR/GBP-EUR/USD Exchange Rates EUR/GBP EUR/USD 0.90 0.85 0.80 0.75 1.45 1.40 1.35 1.30 1.25 0.70 1.20 Focus on Last 3 Weeks Settlement FX EUR/GBP EUR/USD 0.895 0.875 0.855 0.835 0.815 0.795 14/01/2013 21/01/2013 28/01/2013 1.370 1.360 1.350 1.340 1.330 1.320 1.310 1.300-10 -
/ MWh Indices Overview Electricity Luminus Electricity Indices: settlements EMarketCWE 58 57 56 55 54 53 52 51 50 49 48 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 Endex based Indices: settlements Endex 123 Endex 126 Endex 12012 Endex 121212 Endex 303 70 65 60 55 50 45 40 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Gas Luminus Gas Indices: settlements Gcomfort Gproxy Gcomfort II Luminus Gas Indices :settlements Igm 42 41 40 39 2.0 1.9 1.8 1.7 38 37 36 35 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 1.6 1.5 1.4 1.3 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Gas ZB based settlements Zee100 GmarketCWE 30 28 26 24 22 20 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13-11 -
Inflation Inflation based indices: settlements Ne Igd 1.85 1.80 1.75 1.70 1.65 1.60 1.55 1.50 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13-12 -
Glossary Overview API APX Belpex Brent CER COAL API#2 DAH EEX Endex EUA GOL 0.1%s HFO ICE NBP Powernext Spark Spread TTF ZEE ZIG American Petroleum Institute Amsterdam Power Exchange (Dutch Spot market) Belgian Power Exchange (Belgian Spot market) North Sea oil benchmark Certified Emission Reductions (CO2 Certificates) Coal delivered CIF (cost, Insurance and Freight) in the area of ARA (Antwerp, Rotterdam, Amsterdam) NAR (Net as Received) and on the basis of coal 25.121 GJ / MT Day ahead European Energy Exchange (German Spot market) European Energy Derivatives Exchange (Belgian-Dutch gas and power Futures market) European Union Allowances (CO2 Certificates) Gasoil 0.1% Sulphur Heavy Fuel Oil Intercontinental Exchange (energy trading) UK gas market (National Balancing Point) French Power Exchange (French Spot market) Spark spreads represent the generating margin of gas-fired power stations. Standard spark spreads are calculated from the difference between power prices and gas prices, adjusted for fuel efficiency. The clean spark spread however takes also into account the cost of carbon dioxide emission allowances. Title Transfer Facility (Dutch market for gas trading) Zeebrugge (Natural gas trading point in Belgium) Zeebrugge Index for natural Gas (Belgian Spot market) Sources FameEnergy Spectron Business Solutions MeteoServices NV The Mccloskey Group European Climate Exchange Commission de Régulation de l Electricité et du Gaz Commission Wallonne pour l Energie Vlaamse Reguleringsinstantie voor de Electriciteits- en de Gasmarkt Federal Planning Brureau: Economic Analyses & Forecasts Belpex SA European Energy Exchange AG Endex European Energy Derivatives Exchange NV Powernext SA UBS PointCarbon APX NV Disclaimer The information contained in this Energy Market Report is for general guidance on matters of interest only. While we have made every attempt to ensure that the information contained in this report has been obtained from reliable sources, EDF Luminus shall not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this report is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will EDF Luminus, its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this report or for any consequential, special or similar damages, even if advised of the possibility of such damages. Certain information contained in this report may be obtained from third parties over whom EDF Luminus has no control. It is explicitly emphasized that EDF Luminus makes no representations as to the accuracy or any other aspect of information derived from those sources. - 13 -