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Nordic Power Extends Losses on Lower-Than-Forecast Spot Price

Jan. 14 (Bloomberg) -- Nordic electricity for next month retreated as the price for power delivered tomorrow was lower in an auction for physical delivery than in open trading of financial futures.

The February contract lost as much as 2 percent to 46 euros a megawatt-hour and traded at 46.35 euros as of 3:11 p.m. Oslo time on the Nasdaq OMX Group’s energy exchange. Electricity for delivery around the clock tomorrow will cost 47.84 euros ($63.90) a megawatt-hour on average, following today’s auction on the Nord Pool Spot AS exchange in Oslo. That’s lower than the financial contract for tomorrow on Nasdaq OMX, which closed at 49.25 euros.

Low temperatures in Oslo are forecast to drop to minus 20 degrees Celsius (minus 4 Fahrenheit) on Jan. 21 from minus 18 today, according to CustomWeather Inc. data on Bloomberg.

Week-ahead power retreated 5.3 percent to 49.60 euros while the next quarter dropped 0.9 percent to 37.60 euros. The contract has gained 6.4 percent since Dec. 27.

The benchmark April-through-June contract may rise later this week due to cold temperatures which may push up power demand, Martin Lagerholm, a market analyst at Sweco Energuide AB, said today by phone from Stockholm.

The region’s hydropower reserves are 4.95 terawatt-hours below the seasonal average and may drop further to a deficit of 11.8 terawatt-hours in two weeks, according to Markedskraft AS data on Bloomberg. The region, which gets more than half of its power supplies by running water through turbines, had a surplus of 9 terawatt-hours as recently as the end of November.

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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