Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 18th December 2015
All power and gas contracts declined this week as prices continued to follow commodity markets lower. Falling oil prices were the primary driver of seasonal gas contracts, with summer 16 gas slipping 3.5% to 32.1p/th. Falls in gas and coal prices fed through to seasonal power contracts, with summer 16 power trimming 3.2% to a record low of £35.3/MWh. Meanwhile, spot gas and power contracts fell to multi-year lows amid unseasonably mild weather, with temperatures 86.5% above the seasonal norm. Day-ahead gas tumbled 11.6% to a five-year low of 31.9p/th and was additionally weighed on by increased gas supplies. Day-ahead power slid 11.4% to £34.9/MWh, the lowest price since July 2014. Brent crude oil dropped 7.7% to average $37.6/bl, reaching an 11-year low of $37.2/bl on Thursday. Prospects of higher Iranian production levels if export sanctions are lifted depressed prices further. API 2 coal prices declined 1.2% this week to average $44.3/t.
Energy Wholesale Market Review Week Ending 18th December 2015.
Energy Wholesale Market Review Week Ending 11th December 2015
Longer-term gas and power contracts returned to downward trends this week as falls in commodity prices fed into the UK energy market. Lower oil prices drove seasonal gas contracts down, with summer 16 gas falling 5.2% to a record low of 33.3p/th. Seasonal power contracts followed, with summer 16 power slipping 2.4% to a record low of £36.4/MWh. Meanwhile, spot gas and power contracts showed diverging trends. Day-ahead gas fell 3.5% to 36.1p/th, a three week low, as mild temperatures (40.1% above the seasonal norm) lowered demand for heating, while higher wind output limited gas demand for power generation. Day-ahead power lifted 4.5% to £39.40/MWh on rising demand and a forecast fall in wind output over the weekend. Brent crude oil declined 7.5% to average $40.8/bl, reaching a seven-year low of $38.7/bl on Friday afternoon, owing to prospects of rising OPEC output. API 2 coal prices trimmed 2.3% to average $44.9/t, hitting a new low of $44.4/t on Friday.
Energy Wholesale Market Review Week Ending 11th December 2015.
Energy Wholesale Market Review Week Ending 4th December 2015
Annual power and gas contracts were relatively stable this week. Annual April 16 gas fell 0.3% to 37.2p/th as pressure from lower oil prices outweighed the prospect of tighter supply margins in 2016. In contrast, annual April 16 power lifted 0.7% to £39.3/MWh despite falls in commodity prices. Spot power and gas prices showed diverging movements. Day-ahead gas rose 1.6% to 37.4p/th as reduced supplies to the UK (-11.5%) outweighed lower demand. Day-ahead power declined 0.8% to £37.7MWh as higher wind generation (+25.8%), rising temperatures (+40.8%) and lower power demand (-3.5%) weighed on prices. Brent crude oil slid 2.4% to average $44.0/bl, reaching a fresh six-year low of $43.23/bl on Friday. OPEC met on 4 December, with sources saying the oil cartel will maintain their high output strategy, potentially keeping prices low. API 2 coal fell 0.7% this week to average $45.9/t, hitting a new low of $45.3/t on Thursday, as global oversupply continued.
Energy Wholesale Market Review Week Ending 4th December 2015.
Written By Graham Paul
