Monthly World EnergyMarket Review

Release Date: May 9, 2016

International Pricing Information

US Current price M/M (%) Y/Y (%)

Power (MWh)

Avg. price ind users $64.00 - 0.30 % - 5.20 %

PJM region weekday $35.25 + 9.10 % - 15.80 %

Palo Verde weekday $20.30 - 37.20 % - 34.80 %

Natural Gas (Dth) per Dth.

Henry Hub $2.101 + 51.20 % - 23.20 %

WTI (US$/bbl)C: $44.66

M/M: +18.90%Y/Y: - 23.70%

Venezuela Oil Basket(US$/bbl)C: $40.55

M/M + 36.30 %Y/Y + 13.30 %

Brazil CEPEA Hydrous Ethanol (US$/l)

C: $0.3791M/M: - 17.30 %Y/Y: - 11.20 %

Europe Current price M/M (%) Y/Y (%)

Baseload Power (MWh) – Month Ahead

Germany € 23.25 - 18.00 % - 23.00 %

France € 23.55 - 16.90 % - 29.90 %

Spain € 39.75 + 7.20 % - 19.70 %

Swiss € 23.25 - 20.70 % - 22.30 %

UK £ 32.07 - 0.16 % - 22.10 %

Italy € 35.25 + 8.50 % - 30.90 %

Natural Gas (MWh)

NL (TTF) € 11.45 - 11.10 % - 47.70 %

UK (NBP) £ 9.38 - 12.20 % - 42.60 %

Rotterdam Coal (US$/t)C: $47.3

M/M: + 13.3 %Y/Y: - 18.20 %

Singapore Fuel Oil (US$/ Ton)C: $210.90

M/M: + 27.10 %Y/Y - 45.40 %

Japan LNG(US$/ Dth.)C: $ 7.00

M/M -17.60 %Y/Y: - 53.30 %

Australia Current price M/M (%) Y/Y (%)

Baseload Power (MWh)

Queensland $59.90 + 4.20 % + 24,40 %

Global Energy Review – International Markets

• Russia's government has not yet taken a decision on the amount of dividends that state-controlled gas producer Gazprom should

pay. Gazprom is due to take a final decision on the size of its dividend payout on its 2015 results by May 19. The government has

approved a new dividend rule requiring state-controlled companies to pay dividends of at least 50 percent of profit on their 2015

results.

• SunPower Corp, the No. 2 U.S. solar panel maker, reported a bigger-than-expected quarterly loss, largely due to a drop in revenue

in its power plant business. Revenue from the company's power plant business decreased 23.5 percent to $180.8 million in the first

quarter ended April 3. Under the power plant business, the company develops a project and also provides related service The

company, majority owned by French energy giant Total SA, said revenue fell 12.7 percent to $384.9 million in the quarter. The net

loss attributable to shareholders widened to $85.4 million, or 62 cents per share, from $9.6 million, or 7 cents per share, a year

earlier.

• Libya may be forced to cut oil production within days if a stand-off between eastern and western factions that has prevented

loadings at the Marsa al-Hariga port continues. The Tripoli-based NOC official said that remaining storage capacity at the port was

limited and filling up fast. An official from the Marsa al-Hariga port said that tanks at Hariga were 7-10 days away from reaching

their full capacity. With no tankers loading crude at the port, Libya will be forced to shut in around 120,000 barrels per day (bpd) of

production, or the export capacity of the port.

International Energy Markets - Review

Global Energy Review – US Markets

• For the week ending April 22, U.S. crude inventories rose by 2.0 million barrels to 540.6 barrels in working inventory. This is a

historically high amount of inventory level for this time of year. Despite the inventory level, NYMEX WTI crude prices have

been on a strong trajectory higher over the course of the month. May crude futures rose from a low of $35.24 in early April to

trade as high as $42.91 before expiring at $42.63 Since early February, front month WTI futures have rallied from a low of

$26.05 to the recent high of $46.78 set by the May contract.

• The May 2016 NYMEX contract expired at $1.995. June is now the prompt month contract and is currently trading at $2.078.

The most recent EIA storage report recorded a 73 BCF injection into storage and inventory levels now stand at 2.557 TCF.

This is the largest injection thus far seen into storage since the titular injection season began on April 1. Some below normal

temps in the major consuming regions for the first few weeks of April kept the need for some lingering heating demand higher

than normal and resulted in abnormally low storage injections. The weekly injection rate is set to resume a more normal level

in the coming weeks as the lack of cooling demand is forecasted to be largely absent from most major consuming regions.

• Forward electricity markets at the major trading hubs continue to follow the lead of natural gas futures and are trading higher

after bottoming out in early March. As natural gas goes, so will electricity pricing. Due to the relatively flat NYMEX forward

prices seen in gas for 2017, 2018 and 2019 longer-term electricity supply deals are looking fairly attractive at this time. As with

natural gas, the impact of summer weather will play a major role in dictating both near-term and longer-term price direction for

electricity prices.

United States Energy Markets - Review

Global Energy Review – European Markets

• Efforts to link the UK’s electricity grid with other European power networks would be set back if the UK decides to leave the EU. A

decision to leave the European Union in the referendum scheduled for 23 June would mean that the UK would not automatically

remain a member of initiatives and institutions working to harmonize EU energy prices and develop cross-border rules for

electricity interconnectors. One of the areas that would be immediately affected is actually interconnectors – both existing and

planned projects, because the UK would no longer automatically be part of the EU regulatory framework for market coupling – an

EU initiative to unify electricity trading and harmonize power prices across Europe.

• Energy efficiency is a proven way of achieving the EU’s energy and climate policy goals. It contributes to a structural solution for the

54 million Europeans who are not able to heat their homes properly. Reducing energy consumption will also improve the bloc’s

energy security, as for every 1% of additional energy savings, gas imports are reduced by 2.6%. The jobs potential in the sector is

enormous: realising Europe’s full cost-effective energy savings potential would create or maintain over 11 million jobs in the EU. This

is equal to half of the people currently unemployed in Europe. It would also see increased competitiveness due to reduced energy

bills, health benefits because of better indoor air quality and greenhouse gas cuts. Local and regional governments have multiple

projects in the pipeline to implement energy efficiency measures. The measures foreseen in these local anchored plans are

expected to lead up to 20% reduction of final energy consumption by 2020. An analysis of submitted monitoring reports concludes

that signatory cities are well on track to reach their targets, in particular, they have reached a 14% reduction in final energy

consumption.

European Energy Markets - Review

Global Energy Review – Asia/Pac Markets

• China: For the seventh year in a row, Asia was the world’s largest regional market for new wind power development, with

capacity additions totaling nearly 33.9 GW. China added 30.8 GW of new capacity in 2015, once again the highest annual

number for any country ever. This is almost twice the 2013 figure, when China installed 16 GW of new capacity.

• Vietnam: China and most of ASEAN are sticking to utilizing and building coal-fired power plants, but Vietnam is slowly

backing away from coal. Prime Minister Nguyen Tan Dung revealed that the country will stop building coal-fired power

plants and shift its focus to gas and renewables to power its electricity grid. He further added in a statement that new energy

plans must zero in on protecting the environment and must strictly adhere to "international commitments on cutting

emissions."

• Japan: With Japan having fully liberalized its electricity retail market since the start of April 2016, the country is just one step

away from unbundling its transmission and distribution sector. Whilst Japan’s electricity market has been partially liberalized

since 2000, ten big EPCOs still dominate the market. The downside of the regional monopolies is the lack of system which

transmits electricity beyond regions, little competition, strong price control, and little flexibility. The main purpose of electricity

system reform is firstly to secure stable supply. The other goals of the liberalization are to reduce electricity costs and expand

the choices of consumers and business opportunities of operators.

Asia-Pac Energy Markets - Review

Global Energy Review – LATAM Markets

• Peru: As part of its adaptation and mitigation goals to tackle climate change, Peru plans to restore 3.2 million hectares offorest by 2020. The country will be working on its forest initiative with several environmental organizations, including Sustainable Management of Forest Heritage and Wildlife at Peru's National Forestry and Wildlife Service (Serfor), Agro Rural and Minagri. Peru has over 10.5 million hectares of land that can be reforested, comprising 7.5 million hectares in the highlands, 2.5 million in the jungle, and 500,000 on the coast. According to Mirbel Epiquien, Director General at Serfor, Peru has nearly 1,600 trees per person, and “over 4,000 out of the 22,000 flora species recorded in the country are trees.”

• Columbia: In evaluating how to implement the Paris Agreement, Colombia’s National Planning Department (DNP) conducted an analysis of the investments required to “fulfill of the commitment to reduce emissions of greenhouse gases compared to a baseline scenario in 2030 by 20%" , the institution said in a statement. Results shows about USD $1 billion in investments will be necessary annually, of which roughly 69 percent will need to go to the transport sector. The results also show implementation will lead to a two percent reduction in the country’s unemployment rate.

• Argentina: Argentina’s new renewable energy law aims to elevate the amount of renewable energy consumed nationally from 1.8% to 8% by the end of 2017, representing a 3,000 MW increase. To meet this goal, the country aims to attract $5 billion USD in investments through its first renewable energy auction. Undersecretary for Renewable Energy, SebastiánKind, listed mini hydroelectric power plants as the main interest for investors, followed by biomass, solar and wind. According to Kind, developers, investors, banks, industries and multilateral development banks are showing interest in the renewable energy potential in Argentina. The Ministry of Energy predicts that the renewable energy demand will grow 25 percent in the next 10 years, and under the new renewable energy law the country is expected to add 10,000 MW by 2025

LATAM Energy Markets - Review

Appendix – Commodity Pricing DataBrent Crude - month ahead contract (US$ per barrel)

Foreign Exchange (Euro/USD)

Appendix – Commodity Pricing Data

Coal CIF ARA 2017 delivery ($/T)

Natural gas prices, “Calendar year 2017” NBP in £p/therm, TTF & EEX gas in €/MW/h)

Appendix – Commodity Pricing Data

European electricity prices for “Calendar Year 2017” (€/MWh)

Appendix – Commodity Pricing Data

European day ahead electricity prices (€/MWh)

Glossary

Term Definition

Avg Price Industrial Users Latest unit cost for electricity consumed by industrial users as reported by the U.S. Energy Information Administration (EIA). The EIA usually publishes the data 4 months after the month of consumption.

Henry Hub Natural GasThe Henry hub in Erath, Louisiana serves as the pricing point for natural gas futures traded on the New York Mercantile Exchange (NYMEX).

WTI Crude Oil

The reported WTI light crude oil future price is the market determined value of next month’s contract to either buy or sell in multiples of 1,000 barrels West Texas Intermediate or other light sweet crude oil. WTI light crude oil contracts are only executed for physical delivery in relatively few cases but nevertheless they serve as an important pricing mechanism for contracts that are actually executed for physical delivery.

PJM Region Weekday

The Pennsylvania-New Jersey-Maryland (PJM) interconnection functions as a power pool for all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. The PJM power pool is currently the largest competitive wholesale electricity market. The price reported here is the price during weekdays.

Palo Verde Weekday

The Palo Verde switchyard located in Tonopah, Arizona is a key point in the western states power grid and is used as a pricing point for electricity across the southwest United States. The price reported here is the average market price for peak electricity to be consumed on the next day. Peak hours under this contract are from Mon – Sat between 0700 – 2200 hours local time.

Brazilian EthanolThe market price for a next month delivery of 1liter of ethanol at the mill gate in Sao Palo state as calculated by Cepea.

Rotterdam CoalThe market price for a next month delivery of coal in the Amsterdam – Rotterdam – Antwerp (ARA) port area.

GermanyThe market price for one MWh of baseload electricity to be delivered next month as traded on the EPEX Spot Market www.epexspot.com.

FranceThe market price for one MWh of baseload electricity to be delivered next month as traded on the EPEX Spot Market www.epexspot.com.

Glossary

Term Definition

SpainThe market price for one MWh of baseload electricity to be delivered next month as traded on the trading platform belonging to the Operador do Mercado Iberico de Energia (OMIP).

SwissThe market price for one MWh of baseload electricity to be delivered next month as traded on the European Energy Exchange (EEX).

UKThe market price for one MWh of baseload electricity to be delivered next EFA month as traded on the Intercontinental Exchange (ICE). EFA month stands for the specific calendar in use under the Electricity Forwards Agreement that breaks up the year in equal blocks of 4 and 5 weeks so as to simplify trading.

TTFThe Title Transfer Facility (TTF) is a virtual hub that serves as a pricing point for natural gas contracts within the Dutch gas network. The actual contracts are traded on the European Energy Derivatives Exchange (ENDEX).

NBPThe National Balancing Point (NBP) is a virtual hub that serves as a pricing point for natural gas contracts within the United Kingdown. The actual contracts are traded on the Intercontinental exchange (ICE).

Singapore Fuel OilThe market price for Free on Board (FOB) 180 Centistoke (CST) fuel oil in Singapore port to be delivered next month.

Japan LNGThe reported price for LNG in Japan is derived from the price of West Texas Intermediate (WTI) crude oil by means of an index formula and is reported in US Dollar per decatherm.

Queensland Baseload PowerThe market price for one MWh of baseload electricity to be delivered next month in Queensland as traded on the Australian Securities Exchange (ASX).

Brent Crude OilBrent crude oil is a combination of light crude oil from 15 different oil fields located in the North Sea. Due to the high quality of Brent crude, it is ideal for making gasoline and middle distillates. As such, Brent crude forms the pricing benchmark in Europe and Africa.

Glossary

Term Definition

Foreign ExchangeThe blue line in the graph presents the daily exchange rates Euro to USD while the red line represents the moving average over the last 14 trading days.

Coal CIF ARA 20XX DeliveryCoal is an important input fuel for electricity generation. The coal price reported in appendix 3 is inclusive of commodity Cost, Insurance and Freight (CIF) from its origin to the ports of Amsterdam – Rotterdam –Antwerp (ARA) to be delivered next month.

Natural Gas Price for Calendar 20XX

The featured contracts in this graph are for the delivery of natural gas in the UK (NBP), Dutch (TTF) and German (EEX) markets in the next Calendar year. The benefit of the annual contract is that the buyer has an average price throughout the year rather than individual prices for each month that are priced according to market conditions and can show great variances between winter and summer prices. For further information on the specific country contracts, please refer to the glossary for the world report.

European Electricity Prices for Calendar Year 20XX

The featured contracts represent the current market price for one MWh of baseload electricity to be delivered next calendar year (except UK) as traded on each of the respective exchanges mentioned as source. The electricity market in the UK features the season contract as its longest contract. As a result, the reported market price is the average of the nearest summer and winter contracts.

European Day Ahead Electricity Prices

Next to future contracts, each electricity exchange also features a day ahead contract. The day ahead contracts are characterized by greater volatility than the monthly and longer period future contracts as they are more susceptible to actual supply and demand on the day as well as the other factors influencing the longer contract prices.

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intended for NUS Consulting Group clients.

The material contained herein represents the opinion and views of NUS Consulting

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trends, as well as other broad-based economic, market and political conditions.

This information should not be construed as research or investment/purchasing

advice. Persons responsible for the purchase of energy for an organisation must

consider their organisation’s own objectives, risk tolerance and market forecast

when undertaking energy purchasing decisions.

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