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Energy Wholesale Market Review


Energy Wholesale Market Review Week Ending 27th November 2020

All power contracts rose this week, supported by periods of notably low wind generation midweek, leading to tight supply margins. Higher gas prices also fed into power markets for much of the week. As a result, day-ahead power rose 14.8% to £51.1/MWh. In parallel, day-ahead gas rose 19.7% to 41.40p/th, supported by generally declining temperatures for much of the week, with temperatures projected to fall further still into next week. Consequently, December 20 gas was up 10.5% to 41.10p/th, and January 21 gas increased 9.0% to 41.67p/th. Similarly, all seasonal gas contracts increased this week, up by 2.6% on average. Summer 21 and winter 21 gas increased 5.0% and 3.7% respectively, lifting to 33.20p/th and 42.00p/th. Brent crude oil climbed for the third consecutive week, lifting a further 7.3% from the week prior to average $47.28/bl, reaching an eight-month high of $48.11/bl on 25 November. Oil prices continued to rally on ongoing COVID-19 vaccination developments, easing market uncertainty which has generally acted to dampen Brent crude prices in weeks prior. Further support was leant to prices during the week from OPEC and allies including Russia looking to extend the duration of their production cuts when they meet next week, to offset weak demand over the winter months. EU ETS carbon climbed for the third consecutive week, rising 2.5% to average €27.65/t this week. Prices reached a two-month high of €27.79/t on 26 November, supported by strong auction results.

Energy Wholesale Market Review Week Ending 27th November 2020


Energy Wholesale Market Review Week Ending 20th November 2020

All gas contracts fell this week, reflecting a period of warmer weather experienced throughout the week, compounded by reduced demand. As a result, day-ahead gas fell 6.7% to 34.60p/th, owning to the aforementioned conditions. Similar to gas contracts, the majority of power contracts declined this week with the notable exception being the day-ahead contract which rose 20.3% to £44.5/MWh, supported by weaker renewable output during the week combined with periods of lower wind generation. December 20 gas was down 7.9% at 37.21p/th, and January 21 gas decreased 8.9% to 38.22p/th. All seasonal gas contracts declined this week, down by 4.4% on average. Summer 21 and winter 21 gas dropped 8.0% and 4.5% respectively, subsiding to 31.62p/th and 40.49p/th. All seasonal power contracts declined this week, down on average by 3.4%, as summer 21 power decreased 5.2% to £41.40/MWh, while winter 21 fell 2.6% to £48.49/MWh. Brent crude oil climbed again this week, lifting a further 2.1% from the week prior to average $44.05/bl – reaching a two-month high on 19 November with prices at $44.31/bl. Oil prices continued to gain momentum from further vaccination developments announced throughout this week and OPEC+ are looking at the potential of delaying supply increases originally proposed for January 2021. EU ETS carbon climbed a further 2.9% to average €26.23/t, this week. Like other commodity markets, carbon prices rose to a milestone high, reaching a one-month high of €27.60/t on 18 November. Carbon prices, like many global commodities markets this week, found support from the positive news of COVID-19 vaccinations.

Energy Wholesale Market Review Week Ending 13th November 2020.


Energy Wholesale Market Review Week Ending 13th November 2020

The majority of power and gas contracts increased this week. The day-ahead contracts were an exception with day-ahead gas slipping 0.9% to 37.00p/th. The contract hovered around the 37.00p/th mark for much of the week, with a drop in gas-for-power demand amid high levels of wind generation providing a ceiling for prices. Day-ahead power dropped 17.2% to £37.00/MWh. The contract decreased throughout the week with consistently strong wind generation and forecasts for this to continue into the first half of next week seeing the contract end the week over £10.00/MWh lower than it started. In contrast, all seasonal gas contracts moved higher, up by 1.2% on average. The summer and winter 21 contracts increased 1.1% to 34.37p/th and 42.40p/th, respectively. Most seasonal power contracts increased, rising 1.1% on average. Summer 21 power climbed 1.2% to £43.66/MWh and the winter 21 contract gained 1.7% to £49.76/MWh. Brent crude oil jumped 8.5% to average $43.16/bl, this week, reaching a two-month high of $45.21/bl on 11 November. API 2 coal gained 2.8% to average $55.75/t, hitting a four-week high of $59.80/t on Friday. EU ETS carbon climbed 7.4% to average €26.23/t, this week. Like the other commodity markets, carbon prices rose to a milestone high, reaching a one-month high of €26.74/t on Wednesday 11 November.

Energy Wholesale Market Review Week Ending 13th November 2020


Energy Wholesale Market Review Week Ending 6th November 2020

Power contracts generally experienced upward price movements this week, with exceptions of the month-ahead contract and Q121 contract, both falling by 1.2% and 1.8% respectively. Power contracts have been predominately supported by low wind outturn throughout the week which has led to tight supply margins. The Day-ahead power contract benefitted from the aforementioned system conditions, rising 25.0% to £44.7/MWh. Gas contracts contrasted this, likely as a result of a short spell of increased temperature above seasonal normal levels, reducing demand. As such, day-ahead gas fell 1.4% to 37.45p/th. December 20 gas was down 5.1% at 40.50p/th, and January 21 gas decreased 0.7% to 41.79p/th. Most seasonal gas contracts rose last week, up by 5.2% on average, with summer 21 gas increasing 0.7% to 34.00p/th, while winter 21 gas dropped 0.2% to 41.93p/th.  All seasonal power contracts grew, up on average by 1.5%, as summer 21 and winter 21 expanded 1.8% and 0.5% respectively, rising to £43.15/MWh and £48.91/MWh. Brent crude oil remained relatively static last week, averaging $39.76/bl. In recent weeks, the Brent crude price had remained relatively stable sitting above the $40.00/bl mark, but has slipped as a result of market uncertainty with global coronavirus cases escalating daily. EU ETS prices rose last week. Prices increased by 3.5% to average €24.43/t, lifting above recent price trends in the last fortnight where prices have remained close to €23.00/t.

Energy Wholesale Market Review Week Ending 6th November 2020

Written By Graham Paul

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