Netherlands: Market rises in response to signal from gas price
The Dutch curve recovered part of the losses sustained in the previous week over the past seven days, participants said on Friday.
Calendar Year 2011 Baseload rose above the €50.00/MWh support level, where it had fallen the week before.
However, it did not overcome the €51.00/MWh resistance level, closing on Friday at €50.90/MWh, up by €1.20/MWh week on week. The remaining curve contracts increased by a similar margin. Traders said the curve advanced mainly due to some small gains in gas and carbon prices.
"It is mainly gas moving up," said one trader. "Spark spreads are still low and that means any move up in the gas will push up power," the trader added.
ICIS Heren data showed the front-year TTF gas price added 0.5% week on week, to close at €20.50/MWh on Friday, while the front year EUA contract added 0.3% in the same period to close on Friday at €14.45/tCO2e.
The spread between the Dutch and the German front year contracts shrank due to smaller movements in the German price.
The Dutch Cal '11 Baseload on Friday was trading at a €0.15/MWh premium to its German equivalent, having bounced from a €0.85/MWh discount recorded seven days before.
The Dutch Cal '12 Baseload narrowed its discount to Germany from €1.50/MWh to €0.30/MWh, but is yet to move into positive territory.
"The only strange spread is on Cal '12 [Baseload]," said a trader.
"It is negative, while the spreads on Cal '11 and Cal '13 are positive and it doesn't seem to be related to fundamentals," the trader added.
August Baseload signed off on its last day of trading before delivery, at €43.15/MWh, which was significantly below the July price as expected.
September Peaks traded on Friday at €60.00/MWh, while the Baseload was assessed at €0.50/MWh up week on week, at €48.50/MWh.
Q4 Baseload traded at €52.50/MWh, up by €1.15/MWh on the week.
Participants said they expected limited volatility next week, mentioning the fact that the system is well supplied and the traditional lag in activity that has been observed during the month of August in previous years.
"I think there will be no big moves [at the beginning of August]" I don't expect to see a rally. The market should trade up and down on either side of a maximum range of €1-2/MWh."
In this scenario, gas prices will be the main positive drivers, while a bearish prompt will be the negative driver.
"The prompt this week was lower and next week will likely be even lower due to the holiday season," said a trader.
Day-ahead Baseload closed on Friday at €37.75/MWh, in almost perfect alignment with the APX-ENDEX exchange's outturn of €37.74/MWh.
Week Ahead was estimated on Friday at around €40.65/MWh, which compares with the level it traded at seven days before, of €43.75/MWh. FR
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