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Key Market Insights

ICE Brent fell $0.25 to settle at $74.29/bbl, whilst WTI lost $0.92 to end the day at $68.69/bbl on Friday. Oil has declined by about 7% this month due to concerns that a trade war between the US and China would upset economic growth and, consequently, demand. The effect of this has been amplified by the added potential of a trade war between the US and Europe. Whilst the US and Europe agreed a deal to ease trade tensions last week, the looming fear continues to drag on the market with hedge funds cutting their bullish positions for a second week in a row. A planned overhaul of US fuel efficiency standards is expected to expand fuel use by 500,000 bpd. This has somewhat countered bearish US oil rig data released last week, which specified an increase of three to 861 working oil rigs. The market continues to closely monitor how OPEC and its allies will ramp up production to account for the disrupted supply from Iran and other countries.

Electricity Price Trends

Price Trends At Key Trading Points ($/MWH)

price trends

Power in the Eastern Interconnect continues to be rather docile with both cash and August valuing in the mid to upper 30s. The lack of weather volatility and unconstrained gas deliverability leaves the grid rather healthy. Term markets remain rather uninteresting as NYMEX gas in 2020-2022 remains near contract lows. In asset news it was announced late last week that the Duane Arnold nuclear facility in Iowa would be closing in late 2020 instead of 2025 due economics. Low power prices in the region, especially in the offpeak, continue to make baseload nuclear assets challenging to operate.

12 month strip price

strip price

West power experienced some of the highest prices in recent memory with SP15 settling $200.51 on the week up from $93.03 the prior week. Pacific Northwest power also participated with Mid-C averaging $166.47 versus $39.28 the prior week. The combination of high electric loads and constrained regional gas pushed power prices up across the board. Term markets were decently supported by the strength in the cash markets as Aug18 SP15 settled $96.00 on Friday and is indicated slightly lower this morning. Mid-C rallied on the week to settle $57 up from $53.75 the prior Monday. Weather forecasts in the 11-15 day model runs show some above average temperatures in southwest and California while the Pacific Northwest remains seasonal.

Other News

SERC power markets were generally slow for the week as normal weather produced cash prices in the low $30s for SOCO. Demand in the Southeast has been mild for over a week now with forecasts continuing to show above normal precipitation compared to a normal pattern. There is a decent Bermuda ridge off the coast but its having a difficult time affecting the East as the Pacific weather pattern remains very active. A bit of liquidity was observed in Aug18 & Sep18 in the low $32s at GTC while Sep18 traded $31.50s, reflecting minimal fear of above normal weather or a gas price that would cause concern.

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 July 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.