Record Oil Prices Are Yet to Impact Upon the European Gas Market According to New Report
Research and Markets (http://www.researchandmarkets.com/reports/c70466) has announced the addition of “Monthly Price Brief – A Review of European Gas and Power Price Trends: August 2007″ to their offering.
Introduction
The growing role of wholesale traded energy markets across Europe creates a greater need for players throughout the value chain to be aware of the latest market movements and developments. From the wellhead or power station gate to the end-user, volatility in the spot and forward price of power and gas is creating an increasingly challenging environment for all market participants.
Scope
An examination of the wholesale gas price trends in Europe’s three key markets – the UK NBP, the Zeebrugge Hub and the Dutch TTF. An assessment of traded power prices in the UK, Belgian, Dutch, German and French wholesale power markets. Insight and analysis into the impact of wholesale markets on the wholesale / retail price interface.
Highlights
Record oil prices are yet to impact upon the European gas market. Dutch-German gas prices will become increasingly interlinked UK gas plant investment is an important structural hedge for RWE
Reasons to Purchase
Establish the current level of wholesale and retail energy prices and the fundamental drivers behind movements in the traded value of gas and power Understand how wholesale pricing impacts different facets of the value chain, identifying the potential to limit risk through hedging strategies Forecast future developments in the traded price of gas and power in order to successfully take advantage of arbitrage opportunities
Contents:
OUR VIEW
CATALYST
SUMMARY
ANALYSIS
Record oil prices are yet to impact upon the European gas market
European oil prices led the way to nominal record highs
The US still dominates buyer sentiment in the global oil market
Chinese demand growth will not outstrip vast US consumption
US inventories influence the value of crude on a global basis
Healthy oil inventories contrast with unseasonably low gasoline stocks
Healthy oil inventories contrast with unseasonably low gasoline stocks
US refineries are failing to meet summer driving season demand
America is importing crude products to meet refinery shortfalls
America is importing crude products to meet refinery shortfalls
Key product markets influence the underlying value of crude oil
Global oil market dynamics impact upon Europe’s forward gas market
Oil will have a diminishing short-term impact on EU gas markets
Oil will have a diminishing short-term impact on EU gas markets
Gross retail margin impacts upon key EU energy markets differently
Despite high input costs, German gas prices show scope for significant margin
Tighter conditions in the UK make German comparison complex
Wholesale power costs and retail prices may appear attractive, but exclude high menu costs
The more transparent UK power market interface is difficult to assess accurately against an opaque German model
The UKs liberalized market has delivered cheaper household bills
UK retail pricing is competitive in comparison to Europe, but there is still room for development
UK retail pricing is competitive in comparison to Europe, but there is still room for development
UK gas plant investment is an important structural hedge for RWE
Coal-fired plants are the UK’s foremost source of power generation
Coal-fired plants are the UK’s foremost source of power generation
RWE’s investment in UK gas plant is a sensible structural hedge
The UK offers the greatest opportunity for profitable fuel switching
RWE’s German heartland offers secure coal generation margins
RWE lacks the downstream Dutch presence to offset upstream risk
Dutch-German gas prices will become increasingly interlinked
German and Dutch gas markets show signs of price co-movement
German gas prices are linked to the TTF at the near end of the forward curve
The TTF market and EGT hub in northern Germany exhibits a stronger price correlation
Dutch-German mid-curve gas prices exhibit greater variance
Dutch-German mid-curve gas prices exhibit greater variance
Longer term, however, Dutch-German gas prices begin to re-align
Longer term, however, Dutch-German gas prices begin to re-align
Long-term UK domestic supply contracts are a viable route to market
Longer-term procurement offers greater surety in a bull gas market
UK regulatory changes will promote residential supply innovation
Seasonality plays a pivotal role in wholesale procurement strategy
Long-term domestic supply contracts are a viable route to market
NW European power prices took a sharp downturn in July 2007
Belgian power prices drift, but the forward outlook stays firm for Year-Ahead contracts
French baseload price movements illustrate short-term uncertainty
Germany followed the pan-European trend in baseload power as price instability returned
Dutch power prices were characterized by near end fluctuations
Baseload prices remain stable in the UK, despite flooding and severe weather in July 2007
NW European gas prices are bucking their recent downward trend
Bullish sentiment dominates the NBP as UK gas supply concerns fall back into the spotlight in July 2007
Stronger Dutch prices highlight the bullish sentiment of gas traders across Europe in the short term
Belgian gas prices firm at the far end of the curve
APPENDIX
List of Figures
For more information visit http://www.researchandmarkets.com/reports/c70466
Source: Datamonitor