Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 26th October 2018
This week, wholesale power and gas, and commodity markets experienced mixed movements, with month-ahead gas contracts hitting 11-week lows as high LNG send-out is expected to continue into November with several cargoes contracted to 7 November. Both baseload and peak power contracts experienced mixed movements, with the majority of near-term contracts out to winter 19 falling. The day-ahead contract was the exception, rising as reduced wind output and lower temperatures tightened supply and demand fundamentals. Contracts further along the curve, beyond summer 20, rose week-on-week, following their gas counterparts higher. All gas contracts out to and including winter 19 fell this week. Day-ahead gas decreased 2.9% to end the week at 66.1p/th, following many LNG deliveries in the previous week and several cargoes contracted for next week. This is despite temperatures forecasted to fall below seasonal-normal levels and signals a healthy market. The weekly average Brent crude oil price fell for a third week, dropping 3.8% to average $77.3/bl, down from $80.4/bl the previous week. Oil prices dropped as Saudi Arabia has warned of oversupply in the market this year following the announcement that the nation would increase production to 11.0mn bpd. API 2 coal prices recovered from the previous two weeks of decline, rising 1.3% to average $97.7/t. EU ETS carbon prices slipped 0.5% to average €19.0/t, continuing to remain below €20.0/t throughout the week, with prices dropping as low as €18.3/t on 23 October.
Energy Wholesale Market Review Week Ending 26th October 2018
Energy Wholesale Market Review Week Ending 12th October 2018
All commodities fell this week, with coal and oil ending multi-week climbs. Pressure from curtailing commodity prices, coupled with an increase in wind output and warmer temperatures, cause wholesale power and gas contracts to retreat, with many also hitting lows on 11 October. However, the recent high prices of gas have attracted several LNG tankers to the UK, with cargoes from the US and Qatar arriving this week. Contracts across the curve fell this week, with day-ahead power falling 3.5% to £63.9/MWh amid a surge in wind generation. Seasonal power contracts were down 6.5% on average week-on-week, as lower commodity prices pressured contracts along the curve. Gas contracts along the curve fell week-on-week, with day-ahead gas dropping 7.6% to end the week at 64.8p/th as temperatures are forecast to remain near seasonal normal levels. The weekly average Brent crude oil price fell for the first time in two months, averaging $83.1/bl. Prices fell below $80.5/bl at the end of the week as the US announced it would discuss potential waivers for Iranian imports and as the US stock market fell for a sixth consecutive day amid a slowdown in the global economy and the US-China trade dispute. API 2 coal also fell, dropping for the first time in 10-weeks to average $96.7/t after hitting a five-week low of $94.0/t on 11 October. EU ETS carbon prices reversed the previous week’s gains, losing 2.6% to average €20.6/t. Prices plummeted to their lowest since 20 August, dropping to €18.3/t on 11 October.
Energy Wholesale Market Review Week Ending 12th October 2018
Energy Wholesale Market Review Week Ending 5th October 2018
Near-term power and gas contracts continued lower this week, whilst seasonal contracts recovered from the previous week’s decline. Week-on-week, day-ahead gas prices dropped 4.3% to 70.1p/th, as the gas system was oversupplied following a pickup in Norwegian flows to the UK. Day-ahead power followed its gas counterpart lower, down 1.3% to end the week at £66.3/MWh. All seasonal gas and power contracts increased week-on-week. Seasonal gas contracts increased 3.9% on average with summer and winter 19 up 3.7% and 3.6% to 65.1p/th and 73.1p/th, respectively. Seasonal power contracts were up 3.8% on average, with summer 19 rising 3.1% to £62.0/MWh, despite starting the week at a four-week low of £56.6/MWh. Brent crude oil prices rose for the seventh consecutive week, gaining 3.8% to average $84.7/bl. Oil hit a fresh four-year high of $86.1/bl on 4 October as the upcoming US sanctions on Iran drive supply uncertainty in the market. API 2 coal rose 1.8% to average $99.4/t this week, hitting a five-year high of $100.2/t on 3 September. Winter restocking in Asia continue to sustain prices at current levels, with reports of falling coal inventories in India expected to support demand in the region. EU ETS carbon prices remained unchanged week-on-week, continuing to average €21.1/t with 23.8mn EUAs.
Energy Wholesale Market Review Week Ending 5th October 2018
Written By Graham Paul
