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Key Market Insights

ICE Brent gained $0.56 to settle at $72.58/bbl on Friday whilst WTI gained $0.32 to settle at $67.39/bbl. A rise in US drilling activity had a minor drag on oil prices, whilst geopolitical risks brought oil markets last week to their largest weekly gain since July 2017.

The US, France and Britain launched 105 missiles to Syria on Saturday, allegedly targeting what were three chemical weapons facilities. The strike came as a retaliation for a suspected poison gas attack on April 7th in Douma. US President Trump declared “mission accomplished” the day after the military strikes and there were signs that the move would not escalate - British Foreign Secretary Boris Johnson insisted that the strike was a one-time move and that there was “no proposal on the table” for further attacks. Oil markets could still be on edge amid this geopolitical conflict given what a key crude oil hub the Middle East is. Oil markets saw some bearish pressure after Baker Hughes reported on Friday a 7-oil-rig count increase in the US, demonstrating a rise in drilling activity. This brought the total rig count to 815 in the week to April 13th, the highest since March 2015. Saudi Aramco accounts showed the oil giant to be the world’s most profitable company, with $33.8bn in net income churned out in the first half of 2017. Aramco surpassed the next biggest names Apple ($28.9bn), Samsung ($14bn) and Microsoft ($13.8bn).

Electricity Price Trends

Price Trends At Key Trading Points ($/MWH)

price trends

East power prices started for the week were relatively strong in cash markets as colder than normal weather blankets major metropolitan areas. Term markets started to follow suit late in the week with all major hubs up in the east up anywhere from $0.25-$0.50 when compared to earlier in the week. New Jersey becomes the latest state to join the ranks of Illinois and New York to provide legislative support to the states nuclear facilities. The senate and assembly passed a wide ranging bill on Thursday which is expected to be signed by Governor Murphy. Text of the bill as filed can be found here: https://legiscan.com/NJ/text/S2313/id/1768337/New_Jersey-2018-S2313-Introduced.html

12 month strip price

strip price

In West Power last week, cash prices were the tale of two locations as SP15 was stronger than the previous week and Mid-C was slightly weaker. For the week SP15 averaged $33.21 versus $26.10. Mid-C on the other hand lost $0.49 from the previous week to average $18.50. Term markets were supported on the back of stronger cash and fuels. The Water year is coming at very robust 122%.

Other News

More generation outages last week added additional support to prices in the Southeast. PJM outages are getting close to 70 gigs and Serc continues to hit new highs on the outage front. SOCO traded into the lower $30’s early in the week and fell off slightly as the week went on. Exports out of SOCO are down slightly with line outages dropping TTC’s to interfaces going west and south. With all these unit and line outages there does seem to be some scattered uneconomic generation dispatched for voltage support. Despite all of these variables in the cash, the forward market is roughly unchanged. We saw some liquidity in May which makes sense as spark spreads are decent. Gas burn in the Southeast continues to look strong and should continue to be so until the large base load coal/nuclear units start returning from outage in a few weeks.

Natural Gas Price Trends

Northeast spot natural gas prices ($/MMBTU)

Natural gas spot

NYMEX HH 5-year futures

Natural gas spot

 

All information is pulled from Macquarie and Crius internal databases as of April 2018. All materials published on this document are based on real-time and/or historical data, and are for informational purposes only. Crius Energy makes no representations or warranties, express or implied, as to the quality, accuracy, completeness, or reliability of the information provided here. Crius Energy accepts no responsibility for any loss, damage, costs or expense (whether direct or indirect) incurred as a result of any error, omission or misrepresentation of any information on this page. This content includes predictions, estimates, or other information that might be considered forward-looking. Any forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements.