Energy Commodities: 26/02/10

Unless stated otherwise, all prices are for the close of February 25.

Brent crude oil futures: US$76.23/bbl, down 0.1 per cent, as of GMT 9:00, February 26

WTI crude oil futures: US$78.17/bbl, down 0.0 per cent, as of GMT 9:00, February 26

German power: €47.45/MWh, down 0.27 per cent

Coal: €94.00/t, down 1.05 per cent

Natural gas: GB 32.90p/therm, no change

EUAs for December 2010 delivery: €12.90/t, down 1.23 per cent

CERs for December 2010 delivery: €11.38/t, down 1.04 per cent

Latest buzz
NYMEX crude oil futures appear to be stabilising on the back of a weaker US dollar, coupled with renewed hopes of an uptick in demand. The absence of more bearish news from Europe has also been a welcome development, although analysts have warned that competition between OPEC and non-OPEC suppliers for the growing Asian market, is likely to cap oil prices at US$85/bbl for the first half of 2010. However, the International Energy Agency’s executive director, Nobuo Tanaka, has warned that: “With proliferating uncertainty, the market could easily become again more volatile once economic growth returns and the market potentially tightens.” (Reuters). Mr Tanaka also said that oil producers will struggle to add more than 1mbpd to supply capacity over the next five years, while at the same time, global economic growth of 4-5 per cent a year, could add 1.2mbpd to worldwide oil consumption, while three per cent annual growth would cut oil demand growth to 700,000bpd over the same period.

Over in Southern Europe, Iberian spot prices rose on February 25, thanks to a drop in the amount of electricity being generated by wind farms, which had been at record levels. At mid-day total wind power in Spain stood at 10,547MW, down from a new record of 12,916MW set on the 24th. Spain day ahead power was trading at €21.51/MWh, up €5.91 on the previous session. Although demand is expected to fall due to the coming weekend, wind generation is expected to also decline, suggesting that any short-term down side may be limited.

Yesterday saw EUAs drift down from the gains seen in the previous trading session on the back of a weakening energy complex, triggered in part by poor US employment data. Worryingly for the wider future of the carbon market, Yvo de Boer, who will soon be stepping down from the role of the UNFCCC’s executive secretary, has said that a binding agreement on climate change is unlikely to be agreed at the Mexico summit this year, with the meeting to be held in South Africa in 2011 being more promising.