Netherlands: German power and Middle East unrest push TTF prices up
Prices at the TTF jumped up on both the prompt and the curve on Monday. On the prompt, Day-ahead started trading at €23.60/MWh to reach an intra-day low of €23.20/MWh in the morning. It gained value throughout the day, closing at €24.25/MWh. Other contracts followed the same trend, starting at a low level and gaining value steadily as the close approached.
On the curve, Calendar '12, Summer '11 and Winter '11 were the most traded contracts. Calendar '12 started trading at €27.2/MWh to close at €27.50/MWh. Summer '11 started trading at €24.70/MWh to close at €25.45/MWh. Winter '11 opened at €28.10/MWh to close at €28.45/MWh. 53 trades went though on Winter '11, compared to 27 on Summer '11.
Summer '11 also increased its premium over the front month compared to Friday's close, reaching €1.00/MWh over the front month on Monday, compared to a premium of €0.70/MWh over the front month on Friday.
Traders agreed that rising German curve power prices had the largest role in supporting TTF curve and prompt prices. Prices went up in the afternoon mainly on the basis of concerns that nuclear power will face more and more opposition in the near future. The result of the elections in Germany supported this belief, according to traders.
For this reason, the Calendar year contracts are all pretty close in price, as the effects of decisions taken now on European nuclear plants are expected to have long-term effects. Continuous political turmoil in Libya - and the Middle East in general - gave additional support to the bullish sentiments in the market.
Some participant felt the need to balance their gas portfolio, putting their contracts in line with the German power equivalents. Financial institutions were also buying, according to traders. CF
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