Friday, September 07, 2012

NEI Energy Markets Report (August 27-31, 2012)

Here's a summary of what went on in the energy markets last week:

Electricity peak prices made marginal gains last week across the country. The largest movers were the Western hubs which increased $4-$6 to average $40/MWh in the region. The Eastern hubs barely budged and the Texas hub rose $4 to average $36/MWh. “Power prices across the U.S. moved in mixed directions Tuesday, Aug. 28, finding support from hot weather in California, across the Southwest and Texas but taking on a more bearish bias elsewhere across the country in line with weak spot gas prices. … In addition, generation remains healthy. While several units are slated to shut through September and October, a fairly minimal 22,790 MW is offline nationwide in the meantime, according to IIR Energy. The nuclear generation sector, which could see as many as 30 reactors shut for refueling by the end of the year, represents the largest market share of outages, with 8,337 MW offline. In addition, about 5,568 MW of the total is coal-fired and more than 4,000 MW is gas-fired, IIR said” (SNL Energy’s Power Daily – 8/29/12).

Uranium spot prices fell to $48/lb U3O8 last week. “Although a significant portion of the lowest-priced supply has been cleared from the market, demand remains thin and highly price sensitive at month’s end. Some potential buyers have yet to enter the spot market in spite of the recent drop in the price. In the case of many utilities, there is little room or budget available for inventory or discretionary purchases, and those interested in taking advantage of the price drop must procure management approvals before proceeding. In addition, several market participants still expect that prices could fall even further and, therefore, are delaying purchases in hopes of securing material at even lower prices” (TradeTech’s Nuclear Market Review – 8/31/12).

For more of the report click here.

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