Jan. 23 (Bloomberg) -- Nordic electricity for April through June erased earlier advances after the price for power delivered tomorrow was lower in an auction for physical delivery than in open trading of financial futures.
The contract for next quarter traded unchanged from yesterday at 36.80 euros ($49.12) a megawatt-hour on Nasdaq OMX Group Inc.’s energy exchange in Oslo as of 1:36 p.m. after earlier climbing as high as 37.15 euros. The February contract rose 0.2 percent to 41.85 euros a megawatt-hour after earlier trading at 42.30 euros.
Electricity for delivery around the clock tomorrow will cost 55.90 euros 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 57.50 euros. Forward contracts frequently track movements in prompt prices.
Low temperatures in Oslo may rise to minus 7 degrees Celsius (3 Fahrenheit) on Feb. 4, from minus 14 Celsius a day earlier, according to CustomWeather Inc. data on Bloomberg. That compares with a 10-year average of minus 8 Celsius.
That indicates less demand for electric heating. Power use in the Nordic region tracks temperatures during winter months, with demand dropping when temperatures rise. Next week’s contract dropped 0.6 percent to 38.75 euros a megawatt-hour on Nasdaq OMX Group’s exchange.
The price for the benchmark near-quarter contract “seems very reasonable, although it may fall slightly” in the short term due to a mild weather outlook, Danish energy trading company Energi Danmark A/S said today in an e-mailed research note.
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