Weekly Energy Market Report – Week Three 2015

THE WEEK THAT WAS…

oil-price-drop

Slightly flat week this really; supply and demand continue to do a push-me pull-you dance on both the power and gas markets whilst crude prices have surged off the back of, quite frankly, nothing more than: some commentary from the IEA suggesting that the sell off is having an impact on production; combined with option sellers covering their positions in the underlying. The quantum of the impact that the IEA talks of is unspecified so it could simply be the market hanging its hat on something to stop the slide. It has to be said however that we are in pretty uncharted territory here so it would not be unreasonable to think that oil might stabilise here or hereabouts. Which would be nice as we are running out of ways to say that oil prices are tanking faster than a fast thing tanking…

In gas & electricity each day that passes without an obvious supply/demand shock increases the downward pressure on both the prompt and the curve. So even if we ignore oil the march down goes on in the rest of the complex – albeit at a slower rate. As long as we continue to see LNG tankers hoving into view and only marginal weather deviations from seasonal normal then the premiums will continue to erode. But you can’t argue with taking a long hard look at prices we haven’t seen in years. So it’s decision time buyers – a plump bird in the hand or opt to twist on the weather playing nicely for another 6 weeks or so…

This is just a snippet of our full report of the week that was. If you want the full Energy Market Report – Week Three 2015 please email john.stein@myutilitygenius.co.uk.

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