Energy Wholesale Market Review

This week favoured an overwhelmingly bullish outcome for gas and power prices, both in the near-term and further along the forward curve – underpinned by the uncertatinty surrounding future energy imports into European energy markets from Russia. Day-ahead gas rose 81.3% to 145.00p/th, buoyed by system undersupply as multiple outages at Norwegian gas fields limited Norwegian gas flows. Near-term gas also took direction from European gas markets which saw prices spikes in response to a ~40% drop in Russian flows via Nord Stream 1. Day-ahead power rose 88.9% to £170/MWh, following the strong bullish momentum gained from its equivalent gas contract, and periods of low wind output. July 22 gas was up 55.7% at 235.53p/th, and August 22 gas increased 51.0% to 268.97p/th. Longer-dated gas contracts were buoyed by concerns over winter storage supply, amid falling Russian flows alongside an extended 90-day outage at the US Freeport LNG terminal. All seasonal gas contracts experienced gains this week, rising by 14.3% on average, while both winter 22 and summer 23 gas increased 31.0% and 14.8% respectively, lifting to 312.90p/th and 204.30p/th. Similarly, seasonal power contracts followed their gas counterparts, up on average by 9.6%, as winter 22 and summer 23 expanded 21.8% and 8.8% respectively, rising to £299.55/MWh and £185.00/MWh.

Wholesale price snapshot

Energy Wholesale Market Review Week Ending 17th June 2022.