Market Comments (06/09/10): Friday’s session maintained the bullish sentiment that took hold of the power curve last week and saw all monthly, quarterly and seasonal contracts achieve day-on-day gains. Summer ’11 baseload rose by £0.46/MWh boosted by firm corresponding NBP contracts which were up 0.775p/th, this gain tightened the spread between Winter ’10 and Summer ’11 baseload to only £1.42/MWh. There was an increase in interest on 2012 season contracts; this was unexpected as recent weeks have not shown any liquidity on contracts so far out. Some speculate that this interest can be attributed to rumours of plant closures in 2013, whilst others believe that it is a result of gains on gas. Despite the rise in back-end contracts, trade on the front-month was not so strong with baseload contracts first trading at a small £0.05/MWh premium, prices were bid up slightly through the session by day-on-day gains were limited to £0.23/MWh. The reason behind this is that the current bearish sentiment on the prompt is restricting increases.

Market Comments (06/09/10): Curve contracts continued to firm on Friday while the prompt settled relatively flat with the exception of the Weekend contract which was subject to selling interest. Linepack maintained a comfortable position throughout Friday's session with strong flows from South Hook (over 40mcm) and some withdrawals from medium range storage contributing to supply. Three cargoes are also due to arrive at South Hook between 4-9 September. However the BBL pipeline which imports gas from the Netherlands will be offline from 6-8 September. BBL has been contributing around 11mcm per day for the last fortnight. Trades taking place for the period where Interconnector maintenance is due to take place (9-23 September) were around the 38.50p/th level. Front month contract Oct 10 gained 0.76p/th settling at 43.23p/th having traded as high as 43.75p/th late in the day. Strong oil prices were influential on contracts further out on the curve - Summer 11 and Winter 11 gained 0.91p/th and 0.59p/th respectively. Currently demand is down to 227mcm and the system is 4mcm long.