Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 26th January 2018
This week saw continued bearish movement across all gas and power contracts. Day-ahead power slipped 1.8% to £48.1/MWh, driven lower by weakening demand across the week. All near-term peak power contracts declined this week. Day-ahead peak power dropped 1.9% to £52.0/MWh. Bearish movement was observed across all near-term gas contracts. Downwards movement stemmed from above average temperatures throughout the week, which eased demand. Seasonal gas, baseload power and peak power contracts all experienced losses, like the previous week. EU ETS carbon prices grew 12.9% to average €9.2/t, and on 25 January prices reached €9.4/t, a six-year high. It has been suggested that the driver behind this is due to new speculators in the market forward trading buying allowances, and assuming tighter supplies in the future. Brent crude oil prices grew 1.0% to average $70.1/bl throughout the week. On 25 January, prices reached a three-year high ($70.9/bl). Comments by the Russian and Saudi Arabian Energy Ministers suggesting an extension to production cuts beyond 2018 supported prices. Baseload power contracts experienced bearish activity last week. API 2 coal prices continued to fall, lowering 3.7% to average $87.6/t. Prices have been influenced by a continued decline in European demand across the week, amid high carbon prices.
Energy Wholesale Market Review Week Ending 26th January 2018
Energy Wholesale Market Review Week Ending 19th January 2018
This week saw bearish movement across all power and gas contracts. Meanwhile, commodities experienced gains across EU ETS carbon and Brent crude oil. Reductions to prices were observed across all near-term gas contracts this week. Day-ahead gas prices dropped 8.3% to 50.0p/th as prices were weakened by declining demand for gas due to milder temperatures and gas-for-power demand lowered amid robust wind generation. Baseload power experienced bearish activity this week. Day-ahead power fell 4.7% to £49.0/MWh. Prices were driven lower by weakening demand, coupled with strong renewables output during the week, boosted by wind generation. All near-term peak power contracts declined, with day-ahead peak power subsiding 7.0% to £53.0/MWh. Seasonal contracts throughout baseload, peak and gas contracts equally observed losses. API 2 coal prices dipped 0.4% to average $91.0/t as prices were influenced by a fading US dollar and weak European demand across the week. EU ETS carbon prices grew 3.6% to average €8.1/t, and on 19 January, prices reached €8.6/t, a two-year high. Growth stems from concerns Germany may scrap its 2020 climate targets during the coalition formation. Brent crude oil prices grew 1.1% to average $69.4/bl throughout the week with prices being influenced by tightening supplies from OPEC and non-OPEC members.
Energy Wholesale Market Review Week Ending 19th January 2018
Energy Wholesale Market Review Week Ending 12th January 2018
This week saw bullish gains across the majority of power, gas and commodity markets, as Brent crude oil rose to a three-year high. However, day-ahead power and carbon prices slummed. Brent crude oil prices rose to average $68.7/bl last week, with prices reaching a three-year high of $69.7/bl on Friday. Prices were driven by falling US crude inventories and production, along with tighter global supplies and continued concerns in Iran. All near-term gas contracts experienced growth last week, with most seasonal gas contracts also rising. Day-ahead gas prices lifted 3.3% to 54.5p/th, driven by rising domestic and gas-for-power demand. The highest seasonal growth was observed in the front gas seasons. API 2 coal prices also saw gains, as they lifted 0.9% last week to average $91.4/t. Prices largely revolved around the $91.5/t mark throughout last week, with continued strong demand from China and Indonesia. Most near-term baseload power contracts increased. However, day-ahead power fell 4.6% to £51.4/MWh, as stable gas, coal and nuclear supplies eased prices. Seasonal power contracts experienced growth last week, notably the front seasons. Day-ahead peak power followed its baseload counterpart downwards, falling 5.4% to £57.0/MWh, although rose mid-week amid low wind output and periods of tighter supplies.
Energy Wholesale Market Review Week Ending 12th January 2018
Energy Wholesale Market Review Week Ending 5th January 2018
Despite gains in day-ahead prices, most power and gas contracts observed bearish movements this week. In contrast, commodities experienced varying degrees of growth, most notability oil and coal. Brent crude oil prices strengthened, averaging $67.0/bl, and on Thursday hit $67.8/bl, its highest price since May 2015. Ongoing production cuts from OPEC, along with unrest in Iran, have supported prices. However, robust output from the US and Russia capped gains. API 2 coal prices grew last week to average $90.6/t. On 3 January coal prices reached $91.5/t, its highest price since March 2013. Strong Asia-Pacific demand, coupled with a weakening US dollar, lifted prices. EU ETS carbon prices remained relatively unchanged from the previous week (€8.0/t on average). Auction pause over the holiday period has likely sustained prices at their high levels since December 2015. Most near-term gas contracts experienced bearish activity last week. Prices were driven down by the news of the return of the Forties pipeline, along with reduced gas-for-power demand amid high wind output. Most near-term baseload power contracts also declined last week. However, day-ahead power climbed to £53.8/MWh, supported by rising demand. Prices gains were capped by strong wind generation throughout the week, along with news of returning French nuclear stations.
Energy Wholesale Market Review Week Ending 5th January 2018
Written By Graham Paul
