EMM Week 27

Most energy commodities weakened again week-on-week, as some gains during the second half of the week were not enough to offset the steep losses at the very start of the week. Oil prices essentially traded alongside equities, amid contradictory reports on expectations over global economic performance and large swings in the value of the dollar. Coal prices generally took direction from the developments in the oil and equity markets, ongoing weak fundamentals in the Atlantic basin, and renewed interest from India and Chinese buyers over the second half of the week. European carbon allowances were supported by buying interest from utilities and financial players, ignoring the weakness in most energy commodities and also in implied fuel switching prices. European forward gas prices softened considerably amid the correction in oil and US natural gas prices, and the bearishness in prompt prices, which plunged on a combination of abundant pipeline and LNG deliveries and mild weather. Healthy fundamentals in most North-Western European power systems pulled prompt and 2009 forward contracts downwards, while the back end of the curves declined only slightly on mixed input from the fuel and carbon markets.