Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 23rd March 2018
This week saw EU ETS carbon prices soar to their highest level since September 2011 after Energy and Clean Growth Minister, Claire Perry, said the UK wishes to stay in the EU ETS scheme until at least 2020. Prices gained 6.4% to average €11.9/t, and on 22 March, prices hit €12.8/t. Higher carbon prices fed into the power market, with seasonal power contracts out to summer 2020 climbing 1.5% on average. Winter 18 baseload power jumped 2.0% to £51.9/MWh. On Thursday, the contract rose to its highest price since December 2014 at £52.2/MWh. In contrast, day-ahead gas and power contracts moved downwards. Week-on-week day-ahead gas dropped 20.0% to 53.6p/th, amid forecasts that temperatures will increase to levels around the seasonal norm. Withdrawals from gas storage surged higher this week, averaging 53.3mcm/d, compared to 4.8mcm/d in the previous week. Storage withdrawals were particularly strong at the start of the week, as falling temperatures led to higher than seasonal normal gas demand. Day-ahead power dropped 18.4% to £51.8/MWh, down from £63.5/MWh the previous week. The contract was pushed lower by a significant drop in its day-ahead gas counterpart. Brent crude oil prices climbed 4.3% to average $67.8/bl and rose to a six-week high of $69.3/bl on 22 March. API 2 coal prices slipped 2.0% to average $74.6/t.
Energy Wholesale Market Review Week Ending 23rd March 2018
Energy Wholesale Market Review Week Ending 16th March 2018
This week saw a reversal of trends compared to the previous week, as day-ahead power and gas contracts leapt upwards. Contracts further along the curve eased downwards, despite some reaching multi-year highs early in the week. Day-ahead gas leapt 25.9% week-on-week to 67.0p/th, up from 53.2p/th the previous week. Growth stemmed from forecasts of below seasonal normal temperatures. Support for prices was coupled with concerns over the capacity of gas reverses in the UK and across Europe. Day-ahead power gained 20.2% to £63.5/MWh. Prices were pushed upwards by a cocktail of low wind generation, rising day-ahead gas prices and higher carbon prices. On 13 March, EU ETS carbon prices hit a fresh six-year-and-a-half high of €11.5/t. Prices grew 6.3% to average €11.2/t this week. Higher CO2 levels amid rising industrial productivity throughout Europe supported carbon price growth. Brent crude oil prices experienced an uptick of 0.4% to average $65.1/bl throughout the week. Oil prices increased with the announcement of new Russian sanctions imposed by the US. Expectations that current OPEC conditions are unlikely to change for the remainder of the year further supported prices. API 2 coal prices extended upon the previous week’s losses, declining 1.6% to average $76.1/t.
Energy Wholesale Market Review Week Ending 16th March 2018
Energy Wholesale Market Review Week Ending 9th March 2018
This week saw substantial losses for day-ahead power and gas prices. While EU ETS carbon prices continued to reach new highs. On 8 March, carbon prices hit a fresh six-year-and-a-half high of €11.1/t. EU ETS carbon prices grew 6.7% to average €10.5/t this week. High volumes of activity on the market, along with strong auction results across the week lead to continued bullish gains for carbon prices. While most gas contracts rose, day-ahead gas fell 46.8% to 53.2p/th. Weakened demand and periods of oversupply on the system aided in weakening gas prices. Similar movements occurred in power contracts, as day-ahead baseload power prices fell 30.9% to £52.9/MWh. Easing power demand and strengthening supply margins supported bearish power prices throughout the week. Day-ahead peak power lost 31.6% to £56.4/MWh. The contract ended the week £3.5/MWh higher than its baseload counterpart. Brent crude oil prices grew 1.5% to average $64.8/bl throughout the week. Brent crude oil prices continue to be weighed down by the bearish fundamentals brought upon by increasing US production. API 2 coal prices fell this week, down 5.5% to average $77.4/t. Prices weakened amid easing European demand. In contrast, lower Russian and Australian output pegged back losses.
Energy Wholesale Market Review Week Ending 9th March 2018
Energy Wholesale Market Review Week Ending 2nd March 2018
This week saw extraordinary spikes in spot power and gas prices amid cold weather, high demand and numerous gas and power supply outages. National Grid issued a gas deficit warning on Thursday. This was the first time that such a warning had been triggered since it was introduced in 2012. The warning is issued by National Grid if a significant supply or demand event occurs, which represents a material risk to the balance of gas in the NTS. The warning followed multiple gas supply outages, including South Hook LNG terminal, Kollsnes gas processing plant, and the BBL interconnector. This resulted in reduced supplies from Norway and Holland. The end of the week (Friday) saw day-ahead prices (i.e. for delivery on Monday) remain high at 100.0p/th, with forecasts of sustained high demand levels into next week. Spot power prices followed gas prices, with issues exacerbated by power plant outages. Day-ahead baseload power prices reached a one-and-a-half year high of £98.0/MWh on Thursday, before falling to £76.5/MWh on Friday. Within-day power prices climbed to £420/MWh. More notable power plant outages included Sutton Bridge, South Humber Bank, and Pembroke CCGT stations, as well as Torness nuclear plant. In contrast to spot prices, almost all other gas and power contracts declined. Seasonal baseload power prices fell on average by 1.5%, and seasonal gas prices dropped 1.7%.
Energy Wholesale Market Review Week Ending 2nd March 2018
Written By Graham Paul
