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Energy Wholesale Market Review


Energy Wholesale Market Review Week Ending 27th July 2018

This week bearish movements swept across gas and power contracts, amid resurging wind generation and easing demand as high temperatures persisted. Day-ahead power dropped 2.2% to £56.1/MWh, owing to resurging wind output, lower gas prices, easing demand and a healthy supply margin. Day-ahead gas fell 1.3% to 57.6p/th. Prices gained support at the start of the week as the system was undersupplied amid a series of strikes at Elgin Franklin and Alywn gas fields in the North Sea. However, towards the end of the week prices eased amid an oversupplied system with the return of UCKS production into Bacton SEAL and lower gas-for-power demand. The majority of other power and gas contracts along the forward curve showed small downwards movements. In contrast, EU ETS carbon prices continued to increase, averaging €17.2/t last week. Prices ended 24 July at €17.5/t, a fresh seven-year high. Prices are currently above many predictions made by analysts in Q218, with most expecting EUAs to reach this high at the end of 2018 ahead of the Market Stability Reserve launch in January 2019. Carbon prices have been influenced by increased thermal generation, with depleting hydro stocks during the ongoing heatwave throughout Europe. Brent crude oil gained 1.8% to average $74.0/bl, up from $72.7/bl the previous week.

Electricity Retail - Energy Wholesale Market Review 27.07.2018

Energy Wholesale Market Review Week Ending 27th July 2018


Energy Wholesale Market Review Week Ending 20th July 2018

The majority of gas and power contracts rose this week, reversing their recent downwards movements, as EU ETS carbon hit a fresh seven-year high, reaching €17.2/t on 20 July. Prices have been supported by higher power across Europe this summer amid ongoing heatwaves sweeping the continent. Day-ahead gas prices gained 2.1% to 58.3p/th. Prices lifted as gas demand for power generation rose as renewables output continued to remain relatively low, and rising temperatures increased demand for cooling. This was despite the gas system being oversupplied throughout the week. Day-ahead power was lowered by a slight increase in wind generation, falling 0.3% to £57.4/MWh. Nearly all seasonal gas and power contracts increased this week. Seasonal gas contracts gained 1.1% on average, with winter 18 gas up 1.7% to 64.1p/th. Seasonal power contracts went up 0.9% on average. Winter 20 power was the exception, remaining at £53.9/MWh. Brent crude oil prices declined 0.4% week-on-week to $73.3/bl. Prices fell to $71.4/bl on 17 July, a three-month low, as concerns over supply disruptions eased and the market’s focus moved to increasing production, with concerns of oversupply from Saudi Arabia. Official data released mid-week showed that US crude inventories increased the previous week as production hit 11.0mn bpd for the first time. API 2 coal prices averaged $89.0/t, down 3.3% from $92.1/t the previous week.

Electricity Retail - Energy Wholesale Market Review

Energy Wholesale Market Review Week Ending 20th July 2018


Energy Wholesale Market Review Week Ending 13th July 2018

Day-ahead gas prices declined 1.1% to 57.1p/th. Prices have fallen as the system was oversupplied for most of this week. Day-ahead power was supported by a fall in renewables, rising 1.1% to £57.5/MWh. The contract hit a fresh three-month high of £58.8/MWh on 11 July with more expensive gas-fired power plant being utilised to meet demand amid low wind output. Nearly all seasonal gas and power contracts decreased this week. Seasonal gas contracts fell 1.8% on average. Seasonal power contracts went down 0.4% on average. Oil prices reversed recent highs, declining 4.7% week-on-week to $73.5/bl. Prices have continued to respond with volatility to the ongoing trade dispute between the US and China amid concerns of potential retaliation by China on US crude shipments. The return of Libya’s oil ports after the end of the Force Majeure helped ease concerns over supply as Syncrude Canada’s oil production facility remains offline. This week saw the release of two monthly oil market reports by OPEC and IEA. OPEC’s report forecasts lower demand for the group’s oil in 2019, which could see oil stocks rise and ease the current tightness in the market which was highlighted in IEA’s report. EU ETS carbon prices averaged €16.1/t this week, 4.5% above the previous week’s average. API 2 coal climbed 1.1% this week to average $92.1/t, hitting a fresh five-year high on 10 July at $93.1/t.

Electricity Retail - Energy Wholesale Market Review 13.07.2018

Energy Wholesale Market Review Week Ending 13th July 2018

 

 


Energy Wholesale Market Review Week Ending 6th July 2018

All gas and power contracts rose this week, following commodities upwards as the oil market tightened further. Day-ahead gas prices boosted 8.1% to 57.8p/th. Prices have been driven higher by low levels of wind output, which increased gas demand for power generation, as well as strong demand for storage injection across Europe and low levels of LNG imports. Day-ahead power was supported by its gas counterpart, lifting 9.0% to £56.9/MWh. The contract hit a fresh three-month high of £58.45/MWh on 3 July as wind output plummeted, meaning more expensive gas-fired power plant was needed to meet demand. All seasonal gas and power contracts increased this week. Seasonal gas contracts gained 2.1% on average, with winter 18 gas up 1.8% to 65.0p/th. Seasonal power contracts went up 1.7% on average, with winter 18 and summer 19 power gaining 1.7% and 2.4% to £62.1/MWh and £51.1/MWh respectively. Oil prices rose further this week due to an increasingly tight market. Continuing geopolitical tensions has led to a potential split in OPEC relations between Iran and Saudi Arabia, as the latter responds to a call from US President Trump to cut oil prices. EU ETS carbon prices averaged €15.4/t this week, currently supported by a recent increase in power and coal prices. API 2 coal recovered recent losses, up 5.0% this week to average $91.1/t. API 2 coal prices hit a fresh five-year high at $91.60/t on 4 July.

Electricity Retail - Energy Wholesale Market Review 06.07.2018

Energy Wholesale Market Review Week Ending 6th July 2018

Written By Graham Paul

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