EMM Week 32

European and global energy commodity markets had a week of mixed developments. After several weeks of high volatility, oil traded within a much more reasonable band, as the bullish signals from Nigeria and lower U.S. inventories, balanced out with bearishness from a stronger dollar and conservative price forecasts from OPEC. European spot coal prices were nominally sideways, whilst forward prices, which had their first weekly gain in weeks, strengthened as FOB prices rose from bullish news on the Chinese energy situation and from further supply problems in Russia and Poland, although the full extent of these bullish movements was not felt due to softer freight rates. Spot gas prices, on the other hand, came crashing down as a supply surplus took hold of the UK market, a development that had a mixed effect on forward prices, which softened slightly at the prompt but strengthened even more slightly at the back. EUAs were pulled down by the bearish fuel relativities, lower forecast emissions and the issuance of allowances by France. North European spot power prices firmed slightly, but the general bearish sentiment prevailed, reflecting fairly healthy systems and low demand levels during the holidays. Forward power prices were almost unchanged week-on-week, with the only exceptions being the month-ahead contracts, which eased-off on a bearish prompt and the improvement of the hydro reservoirs in the Alpine region.