Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 28th September 2018
All power contracts reversed the previous week’s gains, following gas prices lower despite below seasonal normal temperatures expected at the start of next week. Week-on-week, day-ahead gas prices dropped 3.6% to 73.3p/th, but with prices hitting a five-month high of 78.4p/th on 24 September as colder temperatures lead to increased gas demand. Day-ahead power followed its gas counterpart lower, down 4.1% to end the week at £67.1/MWh. Nearly all seasonal gas and power contracts decreased week-on-week, with summer 20 gas and winter 20 power the exceptions. Seasonal gas contracts fell 1.0% on average with winter 18 and summer 19 falling 2.2% and 1.4% to 78.0p/th and 62.8p/th respectively. Seasonal power contracts fell 1.2% on average, with winter 18 power reversing the previous week’s gains and dropping 3.2% to £71.3/MWh. The weekly average Brent crude oil price rose for the sixth consecutive week, gaining 3.1% to average $81.6/bl, up from $79.1/bl the previous week. Oil hit a fresh four-year high at above $82.0/bl on 25 September as the upcoming US sanctions on Iran have supported prices. API 2 coal rose 0.9% to average $97.6/t last week, hitting a five-year high of $98.8/t on 24 September. EU ETS carbon prices experienced a second consecutive weekly decline, dropping 0.2% to average €21.1/t.
Energy Wholesale Market Review Week Ending 28th September 2018
Energy Wholesale Market Review Week Ending 21st September 2018
All gas and power contracts recovered the previous week’s decline, rising as wind generation is forecast to fall and demand expected to rise early last week. Despite EU ETS carbon experiencing its first weekly average decline in 13 weeks, power prices continued to be supported by commodity markets with gains in Brent crude oil and API 2 coal prices. Day-ahead gas prices rose 6.3% to 76.0p/th despite the gas system being oversupplied for much of last week. Day-ahead power followed its gas counterpart higher, up 5.2% to end the week at £70.0/MWh. All seasonal gas and power contracts increased week-on-week. Seasonal gas contracts were up 4.0% on average with both winter 18 and summer 19 gas gaining 4.2% to 79.8p/th and 63.7p/th respectively. Seasonal power contracts increased 2.1% on average, with winter 18 power up 3.2% to £73.7/MWh. The weekly average Brent crude oil price rose for the fifth consecutive week, gaining 1.2% to average $79.1/bl. The market has been looking to the OPEC and non-OPEC coalition meeting in Algiers on 22-23 September, which aims to discuss how the group will mitigate the losses from Iran. API 2 coal rose 0.9% to average $96.7/t. Prices reached a fresh five-year high at the end of the week, hitting $98.4/t. Demand has grown in Europe following the recent record highs in wholesale gas prices across the continent. Average EU ETS carbon prices dropped 8.7% to €21.2/t, down from €23.2/t the previous week.
Energy Wholesale Market Review Week Ending 21st September 2018
Energy Wholesale Market Review Week Ending 14th September 2018
All gas and power contracts decreased week-on-week reversing recent trends of sustained upwards price movements. Contracts were weighed on as EU ETS carbon fell from a 10-year high of €25.8/t on 10 September to below €19.0/t towards the end of the week as hedge funds and speculators exited positions and traders chased short-term profits. Prices recovered to end the week at €20.3/t and average EU ETS carbon prices rose for the twelfth consecutive week, increasing 9.9% to €23.2/t. Day-ahead gas prices fell 4.0% to 71.5p/th amid comfortable supplies and October 18 gas ended the week down 4.6% at 70.6p/th. Day-ahead power prices lowered 4.2% to end the week at £66.6/MWh, with the contract weighed on by a significant rise in wind generation following recently low output. October 18 power fell 4.3% to £67.3/MWh. All seasonal gas and power contracts decreased week-on-week, despite hitting fresh highs on our records towards the start of the week. Seasonal gas contracts fell 2.2% on average with winter 18 gas decreasing 3.5% to 76.5p/th. Seasonal power contracts declined 3.0% on average, with winter 18 power down 3.4% to £71.3/MWh. The weekly average Brent crude oil price rose for the fourth consecutive week, gaining 0.3% to average $78.2/bl, up from $77.9/bl. Prices hit a fresh three-and-a-half year high of $80.0/bl on 12 September. API 2 coal rose 1.8% to average $95.9/t this week.
Energy Wholesale Market Review Week Ending 14th September 2018
Energy Wholesale Market Review Week Ending 7th September 2018
All gas and power contracts increased this week, with front season contracts reaching record highs of any season-ahead contract since 2008. This was due to sustained bullish market fundamentals, including fresh 10-year high carbon prices, five-year high coal prices, and a third consecutive weekly oil price rise. Day-ahead gas prices gained 7.6% to 74.5p/th, a fresh five-month high. October and November 18 gas contracts ended the week at fresh highs of 74.1p/th and 79.1p/th respectively. Seasonal gas contracts gained 6.9% on average. Day-ahead power prices rose 3.7% to £69.5/MWh, supported by soaring commodity prices. Low renewables generation has continued to push power prices up and has led to an increase in thermal power generation, including coal power which resulted in only four coal-free hours since the start of September. Seasonal power contracts went up 3.4% on average. The weekly average Brent crude oil price rose for the third consecutive week, gaining 3.5% to average $77.9/bl. Oil topped $79.0/bl on 4 September as oil platform evacuations began in the Gulf of Mexico ahead of tropical storm Gordon. EU ETS carbon prices rose for the eleventh consecutive week, increasing 3.0% to average €21.1/t. EU ETS carbon hit a fresh 10-year high of €23.2/t on 7 September following the auction of 4.4mn EUAs in Germany at €22.5/t. API 2 coal rose 3.6% to average $94.2/t this week, rising to a fresh five-year high of $96.0/t on 7 September.
Energy Wholesale Market Review Week Ending 7th September 2018
Written By Graham Paul
