July Spark Price overtakes Winter

A range of conflicting fundamental drivers have left traders uncertain of the direction of the July Baseload contract ahead of expiry at the end of this week. Risk premium gathering on the contract last week has helped to propel the dirty spark spread above the front winter.

Our Energy Risk Manager Nick Campbell spoke to ICIS to provide his insight as the premium widened further during early trade on Friday, stating that the spark spread for July could widen further ahead of delivery if volatility in the French market continues, increasing the likelihood of UK exports.

“I think it will continue to grow as long as temperatures are forecast to remain relatively hot in France, as their hydro power levels are relatively low supporting their near curve,” he said.