Curve and prompt bearish on strong hydro, Cal off on the day
Both curve and prompt prices came off for a second consecutive day in the French power market, as excellent hydro levels ensured security of supply and left two large players long. With reservoirs near 100% fullness and low demand due to temperatures in France remaining, as they have done so for the past few months, above seasonal norms the Powernext outturned lower on the day at EUR 29.534/ MWh for Baseload. Day-ahead for Friday on the OTC market had been trading between EUR 30.75 and 30.60/MWh, while Peakload too traded higher than the exchange at EUR 37.50/ MWh. Several players said that the current temperatures, which are 3 degrees above normal, are serving to curb demand and prompt prices. With a bank holiday in France on Monday (1st November), Baseload for Monday was heard to close at EUR 22.50/MWh after opening at EUR 23.00/ MWh. France is expected to export at full capacity (2 GWh) to England on Monday. Liquidity was poor, though with the clocks going back on 31st October (Sunday) and the change of front month, some players pointed to a possible upturn in volume: “People are waiting for November to begin after the clocks change, after then we might see more liquidity,” said one trader. No November contract was heard to deal, but December Baseload was done at EUR 33.10/MWh. “It’s difficult to imagine November and December picking up if hydro players remain so long,” said a trader referring to the low levels. Another offered “we could see reversal in market sentiment over the next few weeks,” as the days get shorter and if the weather turns colder in November, adding though he was “not counting on massive spikes this winter.” Calendar Year ’05 was heard to trade only three times at EUR 33.65/MWh, down EUR 0.20/MWh on its previous close.FF
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