Download Morning Report June 28, 2017

Morning Report June 28, 2017
SECURITIES
Expectation
Oil
Despite the continuous rise in US production and higher rig counts, the international crude oil prices have now been rising steadily for
four straight sessions. The upside has not been big, but it is still a signal that the market might be on the verge of stabilizing, keeping the
OPEC production cuts in mind as well. Yesterday, the Brent front month contract rose another 0,82 USD/bbl and closed at 46,65 USD/
bbl. We expect a largely neutral session Wednesday.
Gas
The European gas markets continued to recover yesterday, distancing themselves from the year-low price level from late last week. On
the British market, the NBP Winter-17 contract was up 0,56 p/th, closing the day at 45,26 p/th. Long-term contracts received support
from a bullish spot market but it is worth mentioning, that supply is still very healthy due to an abundant LNG import to Europe from
the Middle East.
Coal
Following a whole week of falling prices, the bullish sentiment returned to the crude oil market yesterday. Demand for coal remains quite
high in Europe due to low hydropower availability several places on the continent. Prices are therefore just slightly below the highest
price level of the year, which was reached early last week.
Carbon
On the European market for carbon emissions, prices rebounded yesterday following the losses in the previous session. The benchmark
quota contract rose 0,17 EUR/t, settling the day at 4,94 EUR/t. The European Parliament and Commission have started the final negotiations with member countries about the upcoming quota reform.
Hydro
Expected precipitation during the forthcoming ten days is slightly below seasonal normal. The next few days look extremely dry, but a
couple of wet days are expected at the beginning of next week. From then on, the level is set to turn drier once again. Temperatures
should remain slightly below average during the next couple of weeks.
Germany
Responding to the noticeable upside on both the coal and carbon markets, the German power market improved as well in Tuesday’s
trading. The country’s Cal-18 contract ended up rising 0,25 EUR/MWh, settling at 30,70 EUR/MWh. Liquidity was quite low as the holiday season slowly starts to make its market on the European power markets.
Equities
There was a negative sentiment on the international stock markets yesterday. The European Stoxx600 Index was down 0,79 %, while the
US S&P 500 Index fell 0,81 %. The downside was driven by big losses on the technology stocks.
Conclusion
Dry weather forecasts led to a second straight bullish day on the Nordic power market yesterday. The Q3-17 contract rose 0,40 EUR/
MWh, settling at 24,50 EUR/MWh. Further out the curve, the upside was more limited, but the YR-18 contract still edged up 0,20 EUR/
MWh, following the trend of the German power market. It closed at 24,60 EUR/MWh. We expect either a neutral sentiment or a slight
upside in Wednesday’s trading.
Spot
DK1
26-jun
23,04
25,49
27-jun
37,39
37,39
28-jun
33,82
34,16
34,16
DK2
SE3
Forwards
DK1
DK2
STO
MAL
HEL
OSL
SYS
23,46
June
30,48
30,65
28,40
29,00
31,75
24,50
25,44
Q3-17
28,38
29,23
27,93
28,66
30,43
22,42
25,35
2017
26,80
28,50
26,75
26,90
30,73
24,45
SE4
HEL
OSL
SYS
25,49
25,49
27,94
22,56
34,61
37,07
34,61
23,66
34,16
34,42
23,75
SRMC
Coal
Gas
Oil
24,50
June
34,28
28,10
68,63
22,78
Q3-17
34,03
28,43
64,39
24,60
2018
30,70
30,90
64,39
SRMC 2017
EUR/MWh
0
-5
-10
-15
EUR/MWh
32
30
28
26
24
22
20
18
16
14
12
08-02-2016
DARK Spread (coal)
SPARK Spread (gas)
Forward price
ENOQ4-16
ENOYR-17
08-05-2016
08-08-2016
The Morning report is produced on the basis of information about th Nordic power market from sources which Energi Danmark A/S finds reliable. We attempt to continuously keep data correct and up to date. Energi Danmark A/S assume no responsibility for the accuracy of the contents of this report. Energi
Danmark A/S makes reservationsfor typing errors, calculation errors and asume no responibility for any loss or damage arising from the direct or indirect consequences following use of this material. Estimates and recommendations can be changed with no prior notice or warning. The report is confidential
and only intended for clients of Energi Danmark A/S. Information contained in the report is of general nature and cannot be defined as advice. Readers are urged to seek closer advice in relation to specific questions. This material is not to be published or in any other way passed on for unauthorized use.
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