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Energy Wholesale Market Review

Energy Wholesale Market Review Week Ending 27th May 2022

Wholesale gas and power prices were relatively mixed throughout the week, with gains across day-ahead markets and further out on the forward curve too. However, front month contracts across gas and power recorded losses, somewhat indicative of the on-going wholesale price volatility in recent weeks. Day-ahead gas rose 18.4% to 116.00p/th, buoyed by an undersupplied system as new outages at Langeled curtail Norwegian flows. Day-ahead power grew 18.5% to £160.00/MWh, mirroring trends set from its gas counterpart contract. Elsewhere, June 22 gas was down 12.0% at 139.56p/th, and July 22 gas decreased 8.5% to 161.45p/th. Most seasonal gas contracts increased this week though, up by 6.7% on average, with summer 23 gas rising 3.6% to 171.05p/th and winter 24 up 23.3% to average 138.15p/th.  Like gas, the majority of seasonal power contracts saw gains, up on average by 2.6%, as winter with summer 23 lifted 0.9% to £163.00/MWh and winter 23 up 7.6% to average £185.00/MWh. In terms of international commodity markets, Brent crude prices lifted 2.8% to average $115.02/bl, whereas carbon markets registered losses, UK ETS lost 3.1% to average £81.18/t, while the EU ETS dropped 5.8% to average €81.87/t over the week.

Wholesale price snapshot

Energy Wholesale Market Review Week Ending 27th May 2022.

Energy Wholesale Market Review Week Ending 20th May 2022

The majority of gas and power contracts decreased this week. The day-ahead contracts were an exception with day-ahead gas jumping 96.0% to 98.00p/th. Day-ahead gas was supported early in the week by lower levels of LNG send-out and restricted Norwegian supply as a result of maintenance. Month-ahead gas lifted 2.3% to 158.55p/th while the July contract slipped 3.0% to 176.48p/th. Seasonal gas contracts lost 8.9% on average. Winter 22 gas fell 7.0% to 234.70p/th and summer 23 gas dropped 9.8% to 165.05p/th. Day-ahead power gained 50.0% to £135.00/MWh, supported by higher gas prices and forecasts of low wind generation on Monday. June 22 power lost 2.8% to £166.16/MWh and July 22 power declined 4.2% to £181.06/MWh. Seasonal power contracts dropped 4.2% on average. Winter 22 power fell 3.9% to £235.75/MWh while the summer 23 contract lost 5.0% to £161.50/MWh. Brent crude oil climbed 4.7% to average $111.91/bl, driven higher by the prospect of an EU embargo on Russian oil. EU ETS carbon lost 1.5% to average €86.88/t, weighed on by weak auction results and an EU proposal to sell more than 200mn EUAs from the Market Stability Reserve. Meanwhile, UK ETS carbon fell 3.3% to average £83.75/t.

Wholesale price snapshot

Energy Wholesale Market Review Week Ending 20th May 2022.

Energy Wholesale Market Review Week Ending 13th May 2022

Wholesale gas and power prices continued on trend this week, with on-going volatility across both markets – with losses observed across most near-term contracts, with some gains observed further along the forward curve. Day-ahead gas fell 23.1% to 50.00p/th, following the continuation of much warmer weather across the UK, supressing domestic heating demand, coupled with higher LNG send-out amid an influx of cargoes reaching UK terminals this week. Day-ahead power fell 5.3% to £90.00/MWh, mirroring bearish trends set from its gas counterpart. June 22 gas was up 5.0% at 155.00p/th, whereas July 22 gas decreased 1.4% to 182.00p/th. Most seasonal gas contracts declined last week too, down by 2.7% on average, with summer 23 gas dropping 2.1% to 183.00p/th.  Most seasonal power contracts declined this week, down on average by 0.7%, as winter 22 power expanded 1.3% to £245.25/MWh, while summer 23 fell 2.9% to £170.00/MWh. Elsewhere, carbon markets saw mixed movements across both the EU and UK ETS markets. The UK ETS recorded price growth on the week prior, up 5.5% to average £87.54/t, with the EU ETS falling 0.5% to €88.19/t.

Wholesale price snapshot

Energy Wholesale Market Review Week Ending 13th May 2022.

Energy Wholesale Market Review Week Ending 6th May 2022

This week saw mixed price movements; near-term gas and power contracts recorded strong losses, whilst longer dated seasonal contracts increased. Day-ahead gas fell 48.0% to 65.00p/th, following a prominent decline in price observed on Friday 6 May. Prices were driven by strong system oversupply aided by higher Norwegian flows alongside reduced LDZ demand, amid forecasts of seasonally-high temperatures across the UK. Following the strong drop on the gas day-ahead contract, the day-ahead power contract followed, falling 40.6% to £95.00/MWh. The aforementioned near-term bearish drivers fed through to the June 22 gas contract, which was down 4.8% at 147.63p/th, but the July 22 gas increased 5.5% to 184.62p/th. Longer dated seasonal contracts enjoyed stronger price growth, up by 14.4% on average, with winter 22 and summer 23 gas increasing 6.0% and 9.6% respectively, lifting to 246.00p/th and 186.85p/th, remaining volatile amid the ongoing future gas supply concerns. Following their gas counterparts, all seasonal power contracts boosted this week, up on average by 6.6%, as winter 22 and summer 23 grew 5.7% and 7.4% respectively, rising to £242.00/MWh and £175.00/MWh.

Wholesale price snapshot

Energy Wholesale Market Review Week Ending 6th May 2022.

Written By Graham Paul


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