In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Nov 27-Dec 1 delivery bounced back from the previous week in both East Japan and West Japan. The temperatures dropped from the previous week while a series of thermal units in East Japan and West Japan halted operation due to troubles. Supply-demand fundamentals tightened up, pushing up spot prices. Still, the weekly high was capped in the Yen 22 level, equivalent to the ceiling of unit generation costs for oil-fired power plants.

In Tokyo and Kansai, the key areas in East Japan and West Japan, the 24-hour average posted a difference in favor of the East by Yen 2.10 for Nov 27 delivery, Yen 2.48 for Nov 28 delivery, Yen 0.50 for Nov 29 delivery, Yen 1.55 for Nov 30 delivery, and Yen 1.34 for Dec 1 delivery.

In the fuel markets, LNG prices tumbled from the end of the previous week while coal prices gained ground. Crude oil prices were little moved.

DES Northeast Asia spot LNG prices hovered in the low $15 level per mmBtu for prompt January 2024 arrival as of the latter half of the week (Nov 30), compared with the high $16 level as of the end of the previous week (Nov 24). LNG prices were weighed by a softness in European natural gas prices combined with selling pressure in the DES Northeast Asia market. The Ministry of Economy, Trade and Industry (METI) announced on Nov 29 that Japan's LNG inventories for power generation shrank to 2.33 mil mt as of Nov 26, down 160,000mt from 2.49 mil mt in the previous week. The digestion of inventories mirrored a pickup in heating demand, but the level was still more than ample. er period. The level compared with 2.55 mil mt as of end-November last year and the average of past five years at 2.12 mil mt.

FOB Newcastle thermal coal prices in Australia hovered in the mid $133 level for January 2024 loading as of the latter half of the week. The level was up from the mid $129 level as of the end of the previous week.

In the crude oil market, WTI crude for January 2024 stood in the high $75 level as of afternoon on Dec 1 while Brent crude for January 2024 was trading in the high $80 level. Compared with the end of the previous week, WTI was down nearly $0.50 while Brent was almost flat. In the first half of the week, crude oil prices softened as buying interest retreated ahead of a ministerial meeting by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers led by Russia, or OPEC plus. But in the latter half of the week, crude futures were outpaced by buying amid prospects that the monetary tightening policy in US would be relaxed. But crude futures were sold off as OPEC plus skipped an additional production cut in the meeting on Nov 30, alleviating supply woes going forward. As a result, the price fluctuation on a weekly basis was limited.

The actual highest price during the week was at Yen 22.10 in all of nine areas for Nov 27 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Kyushu for Nov 28 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 16.06 in Hokkaido, up Yen 6.85 from the previous week, Yen 16.08 in Tohoku, up Yen 6.87, Yen 16.65 in Tokyo, up Yen 0.38, Yen 16.22 in Chubu, up Yen 1.45, Yen 15.05 in Hokuriku, up Yen 1.12, Yen 15.05 in Kansai and Chugoku, up Yen 1.13, Yen 15.04 in Shikoku, up Yen 1.17, and Yen 14.72 in Kyushu, up Yen 1.90.

In the JEPX auction, volumes of offers were 913.93 mil kWh on a weekly average basis, down 2.7% from the previous week. Meanwhile, bids on a weekly average basis grew by 6.4% to 861.70 mil kWh. The weekly average of trade volumes expanded by 5.6% to 656.00 mil kWh.

Power demand in nine areas of Japan during Nov 27-Dec 1 was a combined 12,172.76 mil kWh, up 8.3% from 11,242.28 mil kWh during Nov 20-24. The figure was up 2.3% from the corresponding period a year earlier. Demand during Nov 28-Dec 2, 2022 after day of week adjustment was 11,893.76 mil kWh.

In the JEPX forward market, no deals were confirmed during Nov 27-Dec 1.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Nov 27-Dec 1 were as below.

Deals reported on EEX (European Energy Exchange) during Nov 27-Dec 1 were as below.

In the second week of December, spot power prices are expected to stay in a tight range from the first week. The weather is forecast to be changeable between sunny and cloudy day after day. Thus, output from photovoltaic generation is likely to fluctuate. But the temperatures are forecast to remain relatively high, a factor that will limit buying interest to meet real power demand. Besides that, some of the thermal units that were suspended for regular maintenance are returning to operation, so that a buildup in power supply is likely to cap spot prices. But if any thermal units additionally go out of service for troubles, concerns will grow over tightening supply-demand fundamentals and give a great impact on the price trends.