Energy Commodities: 18/02/10

Unless stated otherwise, all prices are for the close of February 17.

Brent crude oil futures: US$75.50/bbl, down 1.0 per cent, as of GMT 9:30, February 18

WTI crude oil futures: US$76.62/bbl, down 1.0 per cent, as of GMT 9.30, February 18

German power: €48.25/MWh, up 0.04 per cent

Coal: €94.50/t, down 2.58 per cent

Natural gas: GB 33.80p/therm, down 3.84 per cent

EUAs for December 10 delivery: €12.91/t, down 3.01 per cent

CERs for December 10 delivery: €11.39/t, down 2.98 per cent

Latest buzz
Traders will be looking to the EIA’s weekly oil inventory report which will be released at 11am this morning eastern time. US oil stockpiles have been forecasted to rise by 2.2mbbl. NYMEX crude for March delivery closed up 32 cents at US$77.33/l on February 17, thanks to US housing and industrial output data being more positive than expected. However, a strengthening dollar served to limit gains. As of writing, the value of both NYMEX and Brent crude contracts are dropping, as a result of the continued rise in value of the US dollar and an inventory report issued yesterday by the American Petroleum Institute, which indicated that the weakness in US crude demand remains and also reported a surprise rise in middle distillate stocks.

Analysts at Barclays Capital appear to have absorbed some of the growing clamour regarding the possibility of a medium-term crunch in oil supply. Their base case scenario sees OPEC capacity increasing by just under 3mbpd by the end of 2014, while they expect non-OPEC supply to contract by 2mbpd and demand to increase by “at least 5mbpd”. They conclude their summary by saying that “Our view is that there is a firm rationale for back-end crude prices above $100, and we maintain our long-held forecast of $137 per barrel for 2015.”

US Natural gas inventory data will be announced at 10:30 eastern time and analysts surveyed by Platts are expecting to see a 1.88-1.92 bcf draw, which is above five year average but may already been factored in by traders, given the cold weather.

Over in Europe, yesterday saw a considerable reversal from the gains made on the 16th, with the EUA December 2010 contract dropping below €13/t. The slide continued until around 10am when it became known that an auction of 570,000 allowances on the EEX had cleared at €13.03/t. CERs largely tracked the value of EUAs as normal, but at one point in the morning, the spread contracted to -€1.35/t in early trading, before returning to the more usual -€1.50-1.70/t range. The Spanish government has issued letters of approval to 7 CDM projects, which together are expected to generate approximately 7.1m CERS by year end 2012.