Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 25th May 2018
After a prolonged period of growth, Brent crude oil spent much of this week around the $79.0/bl mark. Prices stayed high as improving US-Chinese relations acted to improve the oil demand outlook, while new US sanctions against Venezuela are expected to further impact the nation’s oil output. However, prices showed a sharp decline on Friday, falling to $76.7/bl in the afternoon, as OPEC suggested relaxing current production cuts. EU ETS carbon prices hit €16.1/t on 24 May, representing a fresh near seven-year high, but dropped to €15.9/t on Friday. Prices were supported by periods of high German power prices and strong EUA demand but were then weighed upon by weak auction results on Friday. API 2 coal prices slipped to $86.5/t by the end of this week, down 3.8% on the previous Friday, driven lower by easing European demand. After a period of bullish movement, day-ahead gas declined upon the previous week, falling 0.3% to 57.1p/th. Gas prices started the week down, but mid-week rose amid numerous gas supply outages. However, by the end of the week an improving supply outlook weighed on prices after the series of planned and unplanned outages across the UKCS came to an end. Prompt power prices opposed trends seen in the gas market, increasing 2.4% to £56.0/MWh week-on-week, supported by lower wind output. However, on 24 May, day-ahead power reached a near three-month high of £57.0/MWh.
Energy Wholesale Market Review Week Ending 25th May 2018
Energy Wholesale Market Review Week Ending 18th May 2018
This week observed bullish movements across all tracked commodities, power and gas prices, with an array of contracts reaching new highs. EU ETS carbon prices hit €15.3/t on 17 May, representing a near seven-year high. Carbon prices were influenced by strong auction results and the cancellation of a UK auction that caused a short-term reduction in supply. Oil prices also maintained their bullish trends. On 17 May intraday prices reached a high of $80.1/bl. Prices settled at a fresh three-and-a-half year high of $79.8/bl on the day. Prices have continued to respond to concerns surrounding US sanctions against Iran, with rising expectations that Iranian crude exports will be impacted upon. Day-ahead gas expanded upon the previous week, rising 4.2p/th to 57.3p/th. On 17 May, prices reached a fresh two-month high of 57.9p/th. Prices have been supported by the bullish growth in crude oil which reached highs throughout the week. API 2 coal prices grew 2.4% this week, averaging $87.8/t (up from $85.8/t). On 15 May, prices reached a two-month high of $90.3/t. Coal prices throughout the week continued to track the gains observed in oil prices. Day-ahead power underwent an uptick of 0.8% to £54.7/MWh, up from £51.3/MWh the previous week. Prices were supported by the bullish growth observed across gas and carbon markets.
Energy Wholesale Market Review Week Ending 18th May 2018
Energy Wholesale Market Review Week Ending 11th May 2018
Last week observed bullish movements across all tracked commodities, power and gas prices, with an array of contracts reaching new highs. On 11 May EU ETS carbon prices reached a near seven-year high of €14.6/t. Prices increased 4.6% to average €13.9/t across the week. Carbon prices were likely driven by a lack of fresh supplies with no auctions being held on Thursday and Friday due to European holidays. The US announced its withdrawal from the 2015 international Iranian nuclear agreement, resulting in the reintroduction of economic sanctions against Iran. This announcement was followed by oil prices reaching a three-and-a-half year high of $77.6/bl on 10 May. Day-ahead gas prices reached a two-month high at the end of the week, reaching 55.0p/th. Outages at gas fields and terminals pegged back early losses and supported near-term prices. The announcement of US sanctions permeated throughout the gas market. On 9 May, day-ahead baseload power prices rose £0.95/MWh above day-ahead peak power (£51.30/MWh). This was driven by robust solar output, and while this remains a relatively rare event, it is a trend we can expect to occur more frequently in future summer seasons. Overall, day-ahead baseload power gained 5.1% to £54.3/MWh. API 2 coal prices gained 1.6% last week, averaging $85.8/t. Coal prices throughout the week tracked the gains observed in oil prices.
Baseload Power
NBP Gas
Energy Wholesale Market Review Week Ending 11th May 2018
Energy Wholesale Market Review Week Ending 4th May 2018
Bullish movement continued across gas and power contracts on the far-curve this week, while contracts on the near-curve predominantly experienced losses. EU ETS carbon and API 2 coal prices rose, while oil pegged back from its recent highs. API 2 coal prices increased 1.2% this week, averaging $84.4/t (up from $83.4/t). Prices reached a two-month high of $85.8/t on 1 May. EU ETS carbon prices grew 0.8% to average €13.3/t this week. Prices were supported by rising European carbon emissions across the week. Nearly all seasonal gas contracts continued to experience bullish growth, gaining 0.6% on average. Winter 18 gas gained 0.2% to 58.0p/th. Similar movement occurred across the power equivalent, as seasonal baseload power prices climbed 0.9% on average. Winter 18 power continued to grow, reaching a fresh three-year price high at £56.3/MWh, an increase of 0.6% from the previous week. Winter 18 is up 7.4% from this month. Day-ahead power lost 1.8% to £51.6/MWh, down from £52.5/MWh the previous week. Power contracts responded to milder temperatures leading to reduced demand, lower gas prices and increased solar output. Day-ahead gas fell 3.2%, down 1.7p/th to 51.8p/th. Prices dropped with warmer temperatures leading to reduced demand. Brent crude oil slipped 0.7% to average $73.8/bl, declining from $74.3/bl the previous week, despite the uncertainty about American-imposed sanctions on Iran.
Energy Wholesale Market Review Week Ending 4th May 2018
Written By Graham Paul
