Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 27th March 2020
Most power and gas contracts fell again this week, as a declining global economy has begun to reflect more heavily onto the UK energy market. A decline in forecast consumption and high than expected temperatures has seen day-ahead gas fall 22.6% to 19.05p/th, reaching more than a 10-year low on 27 March. Day-ahead power fell 5.7% to £29.00/MWh as declining industrial consumption pressed on prices. Slight backwardation was shown in gas prices, as April 20 gas was down 18.1% at 18.81p/th, and May 20 gas decreased 17.8% to 18.32p/th. Most seasonal gas contracts declined last week, down by 3.7% on average, while both summer 20 and winter 20 gas dropped 14.6% and 3.9% respectively, subsiding to 19.75p/th and 32.94p/th. All seasonal power contracts declined this week, down on average by 3.5%, as summer 20 power decreased 9.6% to £28.35/MWh, while winter 20 fell 3.0% to £39.05/MWh. Brent crude oil fell by 8.2% to $26.79/bl as action taken by central banks around the world was enough to lift global equity markets, but failed to have any lasting effect on oil prices, which continue to fall on market concerns over future demand for the commodity. EU ETS carbon slipped by 6.9% to average €16.32/t, despite rising to near €17/t late on in the week as prices followed oil movements. API 2 coal bucked the trend seen by other commodities and climbed by 2.7% to $57.16/t.
Written By Graham Paul
