Energy commodities: 11/02/10

Unless stated otherwise, all prices are for the close of February 10.

Brent crude oil futures: US$72.61/bbl, up 0.1 per cent, as of GMT 9:00, February 11
WTI crude oil futures: US$74.66, up 0.1 per cent, as of GMT 9.00, February 11
German power: €48.12/MWh, down 0.56 per cent
Coal: €91.50/t, down 1.35 per cent
Natural gas: GB 34.00p/therm, down 3.95 per cent
EUAs for December 10 delivery: €13.26/t, down 2.14 per cent
CERs for December 10 delivery: €11.67/t, down 1.60 per cent

Latest buzz
Crude oil futures finished up for the third straight trading session on February 10 and the mini-rally looks set to continue for a few more days. The renewed optimism from oil bulls is mainly being driven by “snowmaggedon” in the Eastern parts of the US, which has delayed the release of US inventory information from the Energy Information Agency (EIA). The data is now scheduled to be released on February 12. In addition, increased confidence regarding the fate of the euro, thanks to the news that a bail-out package for Greece’s debt laden economy is being drawn up, has made crude more attractive to investors.

There is plenty of potential for oil to slide back, given the fact that crude demand in the US remains weak. However, it will take some truly bearish new data to push NYMEX crude below US$70/bbl. In the longer term, the outlook for the next few months, hinges on how the financial market absorbs mounting sovereign debt and whether the global recovery continues once the stimulus packages fall away.

The coal market has softened on the back of reduced buying from Chinese utilities, which is thought to be driven by the approaching new year celebrations. South African exports to China and India fell by 55 and 39 per cent in January compared to December, but the former was merely the result of two less capsize cargoes, while the latter has been attributed to producers maximising end-year exports. Overall market sentiment is confident that prices will rise over the course of the year thanks to strong demand in Asia, but it is not expected that they will reach the levels seen in 2008.

An April-loading South African coal cargo was bid at US$79.75/t FOB Richards Bay and offered at US$81.00/t, down US$2.00/t from February 9, while a July delivery 50,000t multi-origin coal parcel traded at US$76.50/t DES AR on globalCOAL (Reuters).

Meanwhile, China’s General Administration of Customs (GAC) has reported that the volume of Chinese coal imports increased by 2.1 fold over the course of 2009, to 130Mt, at an average price of U$84/t. The surge is attributed to a combination of higher domestic prices and a supply shortage caused by the economic stimulus package. The country’s total coal exports fell 50.7 per cent YoY to 22.4Mt.

Carbon prices have fallen over in the EU, thanks to bearish data from carbon intensive industries, which have triggered fears of an oversupply of EUAs. Volumes were also down, with half as many EUAs trading hands on the ECX compared to February 9. The wider international market has also taken a mild battering, thanks to the situation in the EU and there are reports that the proposed Japanese ETS will be delayed till 2012.