NORDIC POWER-Second-quarter contract inches up on dry weather
* Spot price for Thursday eases to 46.3 euros/MWh
* Front-quarter prices highest since December
OSLO, March 27 (Reuters) - Nordic power prices for delivery in the second quarter inched up on Wednesday to the highest levels since last December as dry weather kept the water supply low for hydropower generation.
The benchmark front-quarter contract
was trading at 41.60 euros ($53.49) per megawatt-hour (MWh) by 1100 GMT, 5 cents higher than the previous day.
"We are short on water in reservoirs, and it's still very cold and dry," a Sweden-based trader said.
The Nordic region gets more than half of its electricity from hydropower plants, and low levels at its reservoirs tend to push up prices.
"Future contracts show we might get quite high spot prices, but I think we might be a little bit overstretched here," the trader said.
He said he expected the hydrobalance to fall to 22 terawatt-hours (TWh) below normal next week.
"This is quite a lot, but it's not extreme. In 2010 we had minus 40 TWh at some point," the trader said.
Point Carbon, a Thomson Reuters market analysis company, forecast the hydrobalance to fall to minus 29 TWh next week.
The difference in forecasts can be explained by different estimates of how much water is stored in the snowpack in the mountains.
Further out on the curve, the Nordic contract for baseload power delivery in 2014
was up 5 cents to 38.75 euros a MWh, lifted slightly by stronger carbon permit prices, traders said.
The benchmark European Union (EU) carbon contract
firmed by 15 cents to 4.77 euros a tonne.
The bullish sentiment from the carbon market was partly offset by coal API2 2014 futures
, which fell 70 cents to $92.90 a tonne. SPOT PRICE
The Nordic average day-ahead power price
for
Thursday delivery was seen to ease to 46.3 euros a megawatt-hour (MWh) from 47.49 euros for Wednesday, analysts at Point Carbon said.
"Start of Easter holidays brings down peak consumption considerably," a Point Carbon analyst said.
On average, consumption was expected to fall by 2,100 MW on Thursday, while wind power was seen increasing only by 160 MW, he added.
Due to holidays, there will be no trading in Nordic power derivatives on the Nasdaq OMX exchange from Thursday until next Tuesday. ($1 = 0.7777 euros)
(Reporting by Nerijus Adomaitis; editing by Jane Baird)
((nerijus.adomaitis@thomsonreuters.com)(+47 9027 6699 Reuters Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))
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Keywords: MARKETS NORDIC/ELECTRICITY