New York, NY (PRWEB) July 03, 2013
NYC-based PIRA Power Group believes that Nigeria LNG force majeure to stir up spot markets. In the U.S., PIRA expects end-October usable working capacity to be up from a year ago. In Europe, the storage deficit improves but remains substantial. Especially, PIRAs analysis of all-natural gas market fundamentals has revealed the following:

*Nigeria LNG Force Majeure to Stir up Spot Markets

An extended delay in total exports from Nigeria could spell critical difficulty in Asia as the summer time peaking season for Japan kicks in. Nigeria LNG has issued a force majeure on exports as a port blockade over a tax dispute has halted all LNG exports since June 22. For now, Europe’s lack of urgency in employing LNG to make up its storage deficit is maintaining worldwide markets effectively stocked, as reloads from Belgium and Spain continue. An ample regional value distinction amongst the N.W. Europe spot cost and these in Asia effortlessly covers the expense of re-directing cargos.

*Projected Finish-October 2013 Storage Capacity

The develop-out of U.S. storage has slowed given that the 2012 injection season. PIRA estimates that only 43 BCF of working gas capacity has been added because end-October 2012. PIRA expects finish-October usable functioning capacity to be up from a year ago.

*Storage Deficit Improves but Remains Significant

As we enter the lowest gas consumption period of the year, provide is not dropping as rapidly as demand, but supply is dropping quick adequate to limit storage injections to the point exactly where spot costs will continue to see help. The European-wide storage deficit remains big, although not as massive as it was a single month ago, and pockets of stability are emerging. The U.K. and Italy are trending toward typical levels, although Germany and France still have a long way to go.

NYC-primarily based PIRA Power Group reports that reduce flows to the Nordic markets bearish for German prices. In the U.S., spot energy prices have been mixed with a moderate month-to-month decline at SP15 and practically unchanged prices elsewhere. Specifically, PIRAs analysis of electricity and coal marketplace fundamentals has revealed the following:

*Reduced Flows to the Nordic Markets Bearish for German Prices

The Nordic markets have been getting a significantly bigger quantity of power relative to a year ago, but larger water availabilities in the Nordic markets will start cutting German power flows. This basic aspect is bearish for German energy rates for the balance of 2013 and 2014. While the grid upgrade is a vital element to watch, regulatory dangers remain the key wild card for German energy rates in the medium term.

*Gone Fission

The month of June began with the retirement of San Onofre Nuclear Generating Station (SONGS) and ended with an unplanned outage at Diablo Canyon 1 Nuclear Station. Spot power rates had been mixed with a moderate month-to-month decline at SP15 and practically unchanged prices elsewhere. Climate in June was mixed, with Northern California, the inland Southwest and Central Rockies warmer than normal, even though the Pacific Northwest and Southern California have been cool. PIRA estimates that Western Interconnect U.S. loads improved in June. Climate-adjusted loads, which turned lower year-on-year in Might, appear to be increasing again this month with CA ISO, Bonneville Energy Administration (BPA) and Sierra swinging back into constructive territory.

*Weakness in Pacific Basin Markets

Weakness in Pacific Basin markets continued this month, despite no new substantive news on Chinas possible import ban on low-cv and high-sulfur coal. Australian supply remains robust, aided by a weaker Australian dollar, take-or-spend contracts, and producers who appear to be trying to lower average fees by boosting production. In the Atlantic, there appears to be some adjustments to coal provide, as U.S. thermal coal exports have begun to fade.

*Current Surge in Cape Trip Charter Rates

For most of 2Q13, the daily average Cape trip charter price was slightly beneath the average level recorded in 2Q12. The recent surge has pushed the rate up to levels recorded two years ago. Several Cape owners would be delighted to see rates retrace the path recorded in 2H11. Nevertheless, PIRA remains unconvinced that the recent rally can be sustained in the close to term. We believe that most of the impetus came from the Baltics new guidelines on price assessments. This has clearly boosted sentiment resulting in a pickup in Cape fixing and some improvement in Cape spot rates.

The information above is element of PIRA Energy Group’s weekly Energy Market place Recap, which alerts readers to PIRAs existing evaluation of power markets about the world as well as the crucial economic and political factors driving those markets.

Click right here for extra information on PIRAs global energy commodity market analysis services.

PIRA Power Group
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