Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 17th March 2017
This week, there was a fall in all gas contracts, as well as a decrease in all near-term and most seasonal power contracts. Brent crude oil prices and EU ETS carbon prices also moved downwards, whereas API 2 coal prices increased. All gas contracts experienced declines this week, with lower gas demand due to higher temperatures. Day-ahead gas lost 2.8% week-on-week to 41.1p/th, amid an oversupplied system with comfortable gas supplies. The month-ahead contract slipped 2.2% to 41.5p/th. Overall, seasonal contracts averaged declines of 1.7%. All near-term baseload power contracts decreased this week, owing to lower gas prices and reduced power demand amid milder temperatures. Week-on-week day-ahead power fell 3.2% to £41.8/MWh. The month-ahead contract (April) lost 2.2% to £42.4/MWh. The majority of seasonal baseload power contracts experienced losses this week. Summer 17 power decreased 1.3% to £41.3/MWh. In contrast, summer 19 power remained at £42.0/MWh. On average, Brent crude oil prices slipped 4.7% to $51.8/bl, with concerns over rising US crude production and a potential increase in US shale output. However, prices ended the week at $52.1/bl, down just 0.6% on last Friday. On Tuesday 14 March, Brent crude oil dropped to $50.8/bl, a three-month low, after an OPEC report showed an increase in both Saudi Arabian and US crude production in February. API 2 coal prices went up 0.3% to average $65.2/t. However, prices ended the week at $64.5/t, unchanged compared to last Friday. EU ETS carbon prices lost 2.5% this week to average €5.2/t, despite ending the week 1.4% above last Friday at €5.2/t.
Written By Graham PaulGraham Paul