Daily (05.12.2018): NBP spot price dropped by 3.3% on Tuesday due to warmer weather and oversupply

05/12/2018 11:34 Daily

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Oil prices gained further momentum on Tuesday, on expectations for supply shortages, a subject to be discussed at the meeting between the OPEC and Russia in Vienna on the 6th of December.

Brent crude price traded 0.6% higher at $62.08 a barrel. At the same time, the cut in Canadian production in the efforts to help OPEC limit oversupply also boosted prices. WTI crude surged by 0.6% to $53.25 a barrel.

 

On Tuesday, European spot power prices diverged. The German day-ahead electricity price hiked by 16.9% to 59.21 euros/MWh, due to forecasts for lower temperatures and a decrease in wind generation. Meanwhile, French power prices for Wednesday delivery dropped by 1.2% to 59.63 euros/MWh, on expectations for weaker consumption.

 

Further along the curve, electricity prices fell, tracking bearish gas markets. The German year-ahead power contract lost 1.3% to 52.27 EUR/MWh, while the French equivalent contract ended 1% down at 57.89 EUR/MWh.

 

Most of the gas contracts were bearish on Tuesday because of increased flows from Norway and the arrival of one LNG vessel during the week. The Q1 2019 delivery contract was 2.5% lower at 66.58 p/therm. Moreover, weaker demand for gas because of warmer weather forecasts put more pressure on the day-ahead contract price. Consequently, NBP spot price slumped by 3.3% to 64 p/therm.

 

EUAs continued their upward trend on Tuesday, after a strong session amid cautious optimism. The contract expiring in 2020 closed 0.6% higher at 21.64 euros a tonne.

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