Coal prices hit the lowest point they’ve been in more than two years last week, according to the weekly market report from supplier npower.
Magali Hodgson, Product and Services Optimisation Manager said: “On the curve, the bearishness [of power prices] came from weak coal prices… but coal prices hit the lowest they’ve been since April 2010 and went through their key support level of $90 a tonne.”
Outlining another key trend of the week, the supplier’s analyst explained the UK’s gas system was “comfortable”.
She said: “The comfortable gas system came about on the back of – even though [there was] very high export to the continent – an improved Norwegian flows with the maintenance starting to ease a little bit. End demand was lower as well on the back of warm temperature.”
The price of oil was “very volatile”, she went on: “Brent oil finished the week higher than where it started with plenty of conflicting news but actually that supported power and gas prices, so they didn’t go as low as they could have.”
Looking forward Ms Hodgson suggested mild temperature forecasts will “continue to limit demand” for power and gas, putting pressure on near term contracts along with the return of more coal and nuclear plants which are offline for maintenance at the moment.
Carbon also seems to be “mounting a recovery of sorts” ahead of the next EU vote on back-loading, she added.
To watch Magali Hodgson talk through the week’s energy trends, watch the Market Report here.