Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 30th August 2019
Wholesale power and gas contracts experienced mixed movements. Both day-ahead power and gas were down, falling 4.3% and 5.1% to £39.3/MWh and 27.8p/th respectively. The contracts were supported by periods of higher wind generation and comfortable gas supplies. The scheduled arrival of two LNG tankers from Qatar early in September has also pressured prices, with supplies expected to remain comfortable despite maintenance reducing gas flows from Norway throughout the month. On average, seasonal gas and power contracts moved lower, down 0.6% and 0.1% respectively. Although the winter 19 contract for both power and gas were higher week-on-week, winter 19 power hit a 15-month low of £51.5/MWh on 27 August and winter 19 gas hit a two-year low of 45.9p/th on 28 August. Brent crude oil was up 0.4% to average $60.2/bl, supported by news of another weekly decline in the amount of oil held in US inventories. API 2 coal prices fell further, down 0.6% to average $63.6/t. Coal prices dropped to $63.1/t on 28 August, the lowest since 19 June. Demand for coal in Europe will remain weak in September as cheaper gas continues to drive coal out of the generation mix. EU ETS carbon prices averaged €26.0/t, down 1.2% from the previous week. Carbon prices ended the week at €26.8/t, a 10-day high. Prices found support from halved auction volumes in August, while an optimistic outlook for US-China trade talks resuming provided uplift.
Energy Wholesale Market Review Week Ending 30th August 2019
Energy Wholesale Market Review Week Ending 23rd August 2019
The majority of baseload power and gas contracts fell this week, with winter 19 power dropping to £52.1/MWh, the lowest since 4 May 2018, while winter 19 gas ended the week at 46.8p/th, the lowest since 2 August 2017. However, day-ahead power and gas contracts rose, with the former up 14.8% to end the week at £41.0/MWh, mirroring its gas counterpart which gained 7.3% to 29.3p/th. Day-ahead gas was supported by the extension of the unplanned outage at Culzean until 24 August, while the start of maintenance at Norwegian gas fields over the bank holiday weekend added further support. September and October 19 gas contracts both fell, down 4.4% and 9.5% to 30.3p/th and 32.1p/th respectively. Forecasts of above normal level temperatures in September have pressured the month-ahead gas contract, offsetting concerns of tighter supplies following maintenance in Norway. September and October 19 power contracts were 3.8% and 6.1% lower at £40.9/MWh and £41.8/MWh respectively. Brent crude oil found support from another decline in US crude stocks and rose 1.7% to average $59.9/bl, while API 2 coal and EU ETS carbon fell to two-month lows of $63.5/t and €25.3/t respectively. Ongoing uncertainty around Brexit, and speculation that a no-deal is increasingly likely, has been a key bearish price driver for carbon this month.
Energy Wholesale Market Review Week Ending 23rd August 2019
Energy Wholesale Market Review Week Ending 16th August 2019
Nearly all wholesale power and gas contracts moved lower this week. Day-ahead power dropped to £35.7/MWh, the lowest since 31 May and was pressured by forecasts of higher wind over the weekend and early next week, at 10.0GW on Sunday and 6.3GW on Monday. Both September and October 19 power moved to three-week lows at £42.5/MWh and £44.5/MWh respectively, while winter 19 power declined 3.2% to £53.9/MWh, the lowest since 2 April. Gas contracts up to and including summer 20 were down with a pickup in UKCS production offsetting ongoing maintenance in Norway. Day-ahead gas dropped 2.7% to 27.3p/th, amid an oversupplied gas system. This was despite the extension of maintenance works at Norway’s Nyhamna gas plant until the 30 September, reducing flows by 7.3mcm/d. September and October 19 gas contracts both fell, down 5.2% and 6.4% to 31.7p/th and 35.5p/th respectively. The month-ahead gas contract has been pressured by forecasts of above seasonal normal level temperatures in September. Both API 2 coal and EU ETS carbon fell to six-week lows, down 1.7% to $64.6/t and 5.9% to €26.7/t, respectively. However, Brent crude oil was unchanged at $59.0/bl, despite ongoing concerns of an economic slowdown and an unexpected rise in US crude stocks last week.
Energy Wholesale Market Review Week Ending 16th August 2019
Energy Wholesale Market Review Week Ending 2nd August 2019
This week, gas contracts experienced mixed movements, while all baseload power contracts rose. Day-ahead gas was up 9.3% at 30.5p/th, supported by maintenance reducing flows from UKCS. This was despite the gas system ending the week oversupplied by 24mcm/d, due to the rerouting of Norwegian gas to the UK. Seasonal gas contract movements were mixed, moving just 0.1% higher on average week-on-week. While winter 19, summer 21 and winter 21 were all slightly higher, both summer 20 and winter 20 gas moved lower. Day-ahead power prices were supported by weaker wind generation during the week, coupled with the rise in day-ahead gas. This saw day-ahead power up 4.3% to end the week at £42.8/MWh. Seasonal baseload power contracts reversed the previous week’s losses, up 1.0% on average. Winter 19 power gained 0.5% to £56.7/MWh, an increase of 5.1% from the same time last month (£54.0/MWh). Brent crude oil was up just 0.2% to average $63.9/bl. Oil prices rose above $65.0/bl on 31 July following news of another weekly decline in US crude stocks, dropping 8.5mn barrels the previous week. API 2 coal prices reversed the previous week’s gains, dropping 2.9% to average $68.1/t, pressured by weaker demand. EU ETS carbon prices averaged €28.7/t, down 1.7% from the previous week amid lower demand for allowances due to a drop in conventional-fired power generation.
Energy Wholesale Market Review Week Ending 2nd August 2019
Written By Graham Paul
