Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 27th September 2019
Nearly all wholesale power and gas contracts, and commodities moved lower. The exception was the day-ahead contracts, with day-ahead power and gas rising 4.6% and 11.5% to £40.0/MWh and 26.8p/th respectively, supported by weaker wind generation and cooler temperatures forecast next week. October and November 19 power dropped 0.9% and 2.2% to £42.0/MWh and £51.9/MWh respectively. The expected return of the Hartlepool 2 (580MW) nuclear reactor on 19 October will bring total available nuclear capacity to 7.5GW (out of 9.0GW), helping offset any periods of lower wind generation this winter. All seasonal power contracts declined, dropping 0.7% on average. October and November 19 gas were down 1.9% and 1.8% to 32.0p/th and 45.1p/th respectively. October 19 gas has been pressured by expectations of comfortable gas supplies next month as the usual maintenance in September comes to an end and several LNG tankers are scheduled to arrive early in the month. All seasonal gas contracts moved lower, down 0.8% on average. Brent crude oil fell 3.8% to average $63.1/bl, with prices slipping from recent highs as previous concerns of lower Saudi Arabian production have eased. API 2 coal prices reversed the previous week’s gains, dropping 3.5% to average $67.6/t, its first weekly decline in four weeks. EU ETS carbon fell 2.5% to average €25.5/t, despite the UK Supreme Court’s ruling that the prorogation of Parliament was unlawful, which will likely ease concerns of a no-deal Brexit flooding the market with EUAs.
Energy Wholesale Market Review Week Ending 27th September 2019
Energy Wholesale Market Review Week Ending 20th September 2019
News of constructive talks between Ukraine and Russia regarding the extension of their gas transit contract and EDF’s announcement that French nuclear reactors are not expected to be shutdown to address safety issues helped reduce gas and power supply concerns and weighed on prices. Day-ahead gas fell 21.6% to 24.0p/th, month-ahead gas lost 15.4% to 32.6p/th and winter 19 gas dropped 2.8% to 48.8p/th. Day-ahead power followed its gas counterpart downwards, down 8.5% to £38.3/MWh, October 19 power lost 9.9% to £42.4/MWh and the winter 19 contract declined 2.6% to £54.1/MWh. Brent crude oil grew 6.3% to average $65.5/bl, prices rose significantly early in the week following drone strikes on Saudi Arabian oil infrastructure which knocked out approximately 5.7mn bl/d of production, equivalent to ~5% of total global output. API 2 coal climbed 3.7% to $70.0/t, with the continuation of strong demand in India to replenish historically low coal stocks helping to push prices higher. EU ETS carbon gained 0.5% to average €26.2/t. Early in the week carbon prices followed oil prices higher, before easing in the second half of the week amid reduced concerns of French nuclear shutdowns.
Energy Wholesale Market Review Week Ending 20th September 2019
Energy Wholesale Market Review Week Ending 13th September 2019
All power and gas contracts and all commodity prices increased this week. Power and gas contracts reached new monthly highs driven mainly by a number of developments in Europe. News of safety concerns at a number of French nuclear reactors, leading to concerns over shutdowns to address the issues, the announcement of the closure of Europe’s largest onshore gas field eight years ahead of schedule and an ECJ ruling which will restrict the flow of Russian gas into Europe all drove power and gas prices significantly higher. Day-ahead power jumped 13.0% to £41.8/MWh, a seven-week high and month-ahead power gained 15.0% to £47.0/MWh. Significant rises were also seen in the seasonal contracts with winter 19 power gaining 9.7% to £55.5/MWh and the summer 20 contract lifting 5.8% to £49.2/MWh. Day-ahead gas surged 34.8% to a one-month high of 30.6p/th with month-ahead gas jumping 22.8% to 38.5p/th. Similar to the power market, notable gains were also observed in seasonal contracts. Winter 19 gas rose 11.9% to 50.2p/th, a one-month high and the summer 20 contract climbed 6.4% to 44.8p/th. Brent crude oil gained 3.9% to average $61.7/bl this week after Saudi Arabia named a new Energy Minister who is expected to push for greater production cuts to counter a slowdown in oil demand growth. API 2 coal prices rose 5.2% to average $67.6/t and EU ETS carbon lifted 2.8% to average €26.1/t.
Energy Wholesale Market Review Week Ending 13th September 2019
Energy Wholesale Market Review Week Ending 6th September 2019
All wholesale power and gas contracts moved lower week-on-week. Gas contracts fell as the arrival of two LNG tankers early in September resulted in higher LNG send-out and led to medium range storage (MRS) reaching 99% capacity. This offset any reduction in flows following maintenance in Norway. Comfortable gas supplies and higher wind generation also weighed on prices, with both day-ahead power and gas contracts hitting record lows; day-ahead power dropped to £30.6/MWh on 3 September, the lowest since 8 September 2016, and day-ahead gas fell to 19.3p/th on 4 September, a 10-year low. All seasonal gas contracts also declined, dropping 1.6% on average. Winter 19 gas ended the week 4.4% lower at 44.8p/th, having dropped to 44.2p/th in the middle of the week, the lowest since May 2017. The expected resurgence in LNG tanker arrivals this autumn and comfortable gas storage levels have been the key drivers for the decline. All seasonal power contracts also decreased, dropping 2.2% on average. Winter 19 power was down 3.8% at £50.5/MWh, the lowest since April 2018. Brent crude oil was down 1.4%, averaging $59.3/bl. Oil prices fell early in the week, with within-day prices dropping to $57.3/bl on 3 September, a near one-month low, as OPEC production cuts continue and the US-China trade war dents demand forecasts. EU ETS carbon prices were 2.5% lower to average €25.4/t. Uncertainty around Brexit continues to weigh on carbon prices, with a no-deal Brexit expected to result in British emitters flooding the market with EUAs.
Energy Wholesale Market Review Week Ending 6th September 2019
Written By Graham Paul
