Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 29th September 2017
Brent crude oil continued to reach fresh highs this week, while all gas contracts experienced gains along with the majority of power contracts. In contrast to other baseload power contracts, the day-ahead contract lowered 7.5% to £40.3/MWh. Losses stemmed from forecasts of high wind generation for early next week and with the news that over the weekend the IFA interconnector will be brought back to full capacity. Winter 17 baseload power experienced a 0.1% increase, rising to £50.1/MWh, whilst the summer 18 power contract rose 0.8% to £42.1/MWh. The day-ahead gas contract rose 0.5% to 44.6p/th, with the system undersupplied amid reduced Norwegian imports due to outages towards the end of the week. This was coupled with an increase in demand. Winter 17 gas climbed 2.0% to 49.8p/th, and the summer 18 contract rose 1.1% to 41.4p/th. On average, seasonal contracts increased 1.0%. Brent crude oil prices gained 3.5% to average $57.9/bl. On Thursday, prices reached a near two-year high of $58.5/bl. Prices were supported by Turkish threats to cut oil imports from Iraq’s Kurdistan region following the Kurdistan independence referendum on Monday. EU ETS carbon prices rose 2.0% this week to average €7.0/t. The outcome of the German election on Sunday strengthened prices with the German Green Party likely to be a part of coalition negotiations.
Energy Wholesale Market Review Week Ending 29th September 2017
Energy Wholesale Market Review Week Ending 22nd September 2017
Brent crude oil and API 2 coal prices continued to reach fresh highs last week. In contrast, all power and gas contracts experienced losses. The day-ahead power contract subsided 20.9% to £43.5/MWh. This was despite continued maintenance to the IFA interconnector, reducing it to 1,000MW, half its full capacity. The month-ahead (October) contract fell 2.6% to £45.5/MWh. Winter 17 power lowered 1.6% to £50.0/MWh, and summer 18 power lost 1.2% to £41.7/MWh. All gas contracts decreased last week. The day-ahead gas contract slipped 4.5% to 44.4p/th, with expectations that LNG shipments to the UK will increase next week. Winter 17 gas decreased 1.7% to 48.8p/th, and the summer 18 contract lost 1.5% to 41.0/th. On average, seasonal gas contracts slipped 1.0%. Although seasonal gas contracts moved lower this week, they are still notably above their levels a few months ago. This is largely due to expectations that gas supplies for this winter will be tight, following the recent closure of the UK’s largest gas storage facility, Rough, and low gas storage levels across Europe. Brent crude oil prices grew 2.2% to average $55.9/bl. On Friday, prices reached a five-month high of $56.4/bl, supported by rising demand and the news of potential extensions to OPEC production cuts. API 2 coal experienced further gains this week, reaching a fresh three-year high of $84.0/t. EU ETS carbon prices slipped 2.4% this week to average €6.9/t.
Energy Wholesale Market Review Week Ending 22nd September 2017
Energy Wholesale Market Review Week Ending 15th September 2017
Brent crude oil, API 2 coal and EU ETS carbon prices continued to reach new multi-month highs this week. In contrast, the majority of power and gas contracts experienced losses. Most baseload power contracts decreased. An exception was the day-ahead contract, which gained 23.6% to £55.0/MWh, a two-month high, with lower wind generation forecast for Monday. On Wednesday, the day-ahead peak power contract was at a discount to baseload power, with the peak contract priced at £47.8/MWh compared to baseload’s £48.0/MWh. This was due to forecasts of high renewables output with wind generation forecast to average 6.8GW and solar generation forecast to peak at 4.2GW. The majority of gas contracts decreased this week. The only exception was the day-ahead contract, which lifted 0.5% to 46.5p/th, with lower temperatures leading to higher demand. Brent crude oil prices gained 2.2% to average $54.8/bl. On Friday, prices reached a near five-month high of $55.6/bl. API 2 coal prices rose 3.1% to average $82.0/t. On Thursday, prices reached $83.8/t, its highest price since January 2014, as strong demand from Asia continued to prove bullish. EU ETS carbon prices jumped 8.9% this week to average €7.0/t. On Thursday, EU ETS carbon reached €7.6/t, its highest price since January 2016, following a breakthrough in closed-door talks intended to overhaul the carbon market post-2020.
Energy Wholesale Market Review Week Ending 15th September 2017
Energy Wholesale Market Review Week Ending 8th September 2017
The majority of power contracts and all gas contracts increased this week, whilst API 2 coal, EU ETS carbon and Brent crude oil prices all reached fresh highs. However, near-term baseload power contracts experienced mixed trends. The day-ahead contract lost 6.3% to £44.5/MWh, with higher wind generation forecast for Monday. The month-ahead (October) contract slipped 1.5% to £46.5/MWh. All seasonal baseload power contracts increased this week, with some contracts hitting multi-year highs. Summer 18 and winter 18 power gained 2.7% and 2.3% to £42.6/MWh and £48.1/MWh respectively, their highest prices since July 2015. All gas contracts increased this week. Week-on-week, the day-ahead contract rose 1.6% to 46.3p/th, with lower temperatures leading to higher demand. The month-ahead (October) contract rose 0.4% to 45.4p/th. Winter 18 gas climbed 3.0%, reaching a seven-month high of 49.9p/th. Brent crude oil prices gained 3.5% to average $53.6/bl. On Friday, prices reached a four-month high of $54.7/bl. API 2 coal rose 1.2% to average $79.6/t. On Wednesday, prices reached $80.1/t, a fresh three-year high, with strong European demand amid low levels of hydro and gas stocks in some European countries. EU ETS carbon prices increased 7.8% this week to average €6.5/t. On Friday, EU ETS carbon reached €7.0/t, its highest price since January 2016, following the rare cancellation of an EUA auction.
Energy Wholesale Market Review Week Ending 8th September 2017
Energy Wholesale Market Review Week Ending 1st September 2017
Several power and gas contracts hit new multi-month highs this week, along with API 2 coal and EU ETS carbon prices. Higher demand forecasts and rising gas prices pushed day-ahead baseload power upwards 9.2% to £47.5/MWh, but most baseload contracts further along the forward curve slipped slightly. Week-on-week the new month-ahead (October) contract fell 0.6% to £47.2/MWh. However, on Wednesday the contract reached £48.5/MWh, the highest price on our records going back to July 2016. Winter 17 power slipped 0.1% to £50.3/MWh but also saw a Wednesday peak, climbing to £51.1/MWh, a near eleven-month high. All near-term gas contracts increased this week, hitting multi-month highs. Week-on-week, the day-ahead contract rose 2.5% to 45.5p/th. On Wednesday, day-ahead gas hit a six-month high of 46.3p/th, amid cooler weather and lower supplies from Norway. The new month-ahead (October) contract rose 0.6% to 45.3p/th. On Wednesday, the contract reached 45.9p/th, its highest price on our records going back to July 2016. Brent crude oil prices slipped 0.8% to average $51.8/bl. The arrival of Hurricane Harvey in the Gulf of Mexico caused the shutdown of around 4.4mn bl/d of refining capacity, weighing on prices. API 2 coal rose 0.8% to average $78.7/t, and on Wednesday reached $79.2/t, a three-year high. EU ETS carbon prices rose 1.7% to average €6.0/t. On Wednesday, prices reached a near eight-month high of €6.1/t.
Energy Wholesale Market Review Week Ending 1st September 2017
Written By Graham Paul
