Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 25th March 2022
This week represented a relatively mixed outcome for gas and power prices, with conflicting market fundamentals dictating the movement of prices. Firstly, day-ahead gas rose 4.9% to 257.00p/th, following Russia announcing it will be looking to seek payment for its gas sold to ‘unfriendly’ countries in Roubles, sparking fears of exacerbated gas supply disruption on the continent. However, day-ahead power fell 10.7% to £201.00/MWh, afflicted by periods of higher wind outturn in the week, softening supply margins – compounded by losses in UK ETS carbon prices week-on-week. Elsewhere, April 22 gas was up 4.2% at 265.00p/th, and May 22 gas increased 4.6% to 268.00p/th – following near-term contracts higher. The majority of seasonal gas contracts rose this week, up by 11.0% on average, with both summer 22 and winter 22 gas up 5.4% and 6.1% respectively, lifting to 271.00p/th and 266.00p/th. Most seasonal power contracts declined this week, down on average by 1.9%, as summer 22 power decreased 0.9% to £228.00/MWh, while winter 22 fell 2.2% to £223.00/MWh. Carbon markets saw mixed movements from the week previous. UK ETS prices fell 3.4% week-on-week to average £77.21/t. However, EU ETS carbon prices rose 4.8% to average €78.97/t.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 25th March 2022
Energy Wholesale Market Review Week Ending 18th March 2022
This week represented another largely bearish period for gas and power contracts, both for short-term delivery and further out on the forward curve too – helped by talks of a potential ceasefire in Ukraine, softening future gas disruption concerns amidst the conflict. As such, day-ahead gas fell 16.9% to 245.00p/th, following the aforementioned developments, coupled with warmer weather and increased LNG send-out, helped by US LNG cargoes arriving at UK terminals. Subsequently, day-ahead power fell 2.2% to £225.00/MWh, taking direction from its gas counterpart, and rising levels of wind generation on the system as the week matured. Font month contracts fell too, down April 22 gas was down 19.7% at 254.30p/th, and May 22 gas decreased 19.0% to 256.15p/th. Elsewhere, the majority of seasonal gas contracts dropped this week, with summer 22 to winter 23 falling 17.0% on average. A notable outlier was the summer 24 contract however, rising 128.6% to 96.00p/th, owing in part to better liquidity in forwards gas contracts this week. Similarly, seasonal power contracts also saw losses this week, down on average by 7.6%, as summer 22 power decreased 11.5% to £230.00/MWh, while winter 22 fell 12.3% to £228.00/MWh.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 18th March 2022.
Energy Wholesale Market Review Week Ending 11th March 2022
This week represented a slightly more bearish outlook overall across most gas and power contracts, despite the more macro bullish fundamentals at play, a consequence of the ensuing conflict in Ukraine at present. Day-ahead gas fell 25.3% to 295.00p/th, primarily due to much milder weather across GB this week and periods of higher wind outturn. Day-ahead power followed its gas counterpart contract lower too, falling 31.3% to £230.00/MWh, with further downward pressure on prices driven through rising wind outturn as the week matured. April 22 gas was down 25.4% at 316.50p/th, and May 22 gas decreased 21.8% to 316.05p/th. Elsehwere, most seasonal gas contracts declined this week, down by 9.4% on average, while both summer 22 and winter 22 gas dropped 22.1% and 17.1% respectively, subsiding to 314.10p/th and 294.96p/th – with the bearish movements of near-term gas contracts filtering through. Similarly, most seasonal power contracts declined this week too, down on average by 7.2%, as summer 22 power decreased 24.9% to £260.00/MWh, while winter 22 fell 18.8% to £260.00/MWh.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 11th March 2022.
Energy Wholesale Market Review Week Ending 4th March 2022
This week represented another overwhelmingly bullish week for wholesale gas and power prices, in what continues to be an unprecedented period for the European energy landscape, as conflict between Russia and Ukraine intensifies. Subsequently, day-ahead gas rose 54.9% to 395.00p/th, following the on-going conflict in Ukraine, fueling future gas supply disruption concerns, with Russia currently supplying ~35-40% of European gas. The largely bullish momentum in near-term gas contracts was felt on the domestic power side too, with day-ahead power rising 47.6% to £335.00/MWh. Contracts further along the forward curve soared too, with April 22 gas up 63.2% at 424.14p/th, and May 22 gas increased 80.7% to 404.41p/th – both reaching fresh highs. Similarly, most seasonal gas contracts boosted this week, up by 21.5% on average, while both summer 22 and winter 22 gas increased 55.9% and 33.9% respectively, lifting to 403.30p/th and 356.00p/th, with summer 22 now at a new all-time high. Most seasonal power contracts boosted this week too, up on average by 12.5%, as summer 22 and winter 22 expanded 49.6% and 30.6% respectively, rising to £346.00/MWh and £320.00/MWh.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 4th March 2022.
Written By Graham Paul
