Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 24th June 2022
This week has seen mixed movements across gas and power wholesale contracts, but with day-ahead markets enjoying price growth in the week on the back of some bullish market fundamentals at play. Subsequently, day-ahead gas rose 17.2% to 170.00p/th, helped by periods of increased gas-for-power demand at the week’s start and maintenance works at select parts of the Norwegian Continental Shelf (NCS), lowering flows into GB. Similarly, day-ahead power rose 2.4% to £174.00/MWh, taking direction from upward movements of its equivalent gas contract, coupled with periods of low wind outturn at the front-end of this week. Conversely, July 22 gas was down 21.1% at 185.76p/th, and August 22 gas decreased 10.6% to 240.35p/th. Elsewhere, most seasonal gas contracts rose last week, up by 3.5% on average, with both winter 22 and summer 23 gas increasing 8.0% and 4.5% respectively, lifting to 338.05p/th and 213.55p/th. Seasonal power contracts saw similar movements, broadly following their gas counterparts, up on average by 2.0%, as winter 22 and summer 23 increased 5.2% and 2.7% respectively, rising to £315.00/MWh and £190.00/MWh. For international commodity markets, they equally did not hold a universal trend, with Brent crude prices falling 7.1% this week to average $111.73/bl, while EU ETS prices climbed 0.4% to average €83.75/t. On the flip side, UK ETS prices fell marginally, down 0.8% to £80.98/t.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 24th June 2022.
Energy Wholesale Market Review Week Ending 17th June 2022
This week favoured an overwhelmingly bullish outcome for gas and power prices, both in the near-term and further along the forward curve – underpinned by the uncertatinty surrounding future energy imports into European energy markets from Russia. Day-ahead gas rose 81.3% to 145.00p/th, buoyed by system undersupply as multiple outages at Norwegian gas fields limited Norwegian gas flows. Near-term gas also took direction from European gas markets which saw prices spikes in response to a ~40% drop in Russian flows via Nord Stream 1. Day-ahead power rose 88.9% to £170/MWh, following the strong bullish momentum gained from its equivalent gas contract, and periods of low wind output. July 22 gas was up 55.7% at 235.53p/th, and August 22 gas increased 51.0% to 268.97p/th. Longer-dated gas contracts were buoyed by concerns over winter storage supply, amid falling Russian flows alongside an extended 90-day outage at the US Freeport LNG terminal. All seasonal gas contracts experienced gains this week, rising by 14.3% on average, while both winter 22 and summer 23 gas increased 31.0% and 14.8% respectively, lifting to 312.90p/th and 204.30p/th. Similarly, seasonal power contracts followed their gas counterparts, up on average by 9.6%, as winter 22 and summer 23 expanded 21.8% and 8.8% respectively, rising to £299.55/MWh and £185.00/MWh.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 17th June 2022.
Energy Wholesale Market Review Week Ending 10th June 2022
This week largely represented more bearish sentiment for wholesale gas and power contracts in GB, with some exceptions further along the forward curve. Subsequently, day-ahead gas fell 39.8% to 80.00p/th, weighed by elevated temperatures across the UK, coupled with higher Norwegian flows as maintenance works at Troll and Kollsnes gas fields ease. Day-ahead power dropped 35.7% to £90.00/MWh, following the strong downward movements from its equivalent gas contract, coupled with periods of higher wind generation in the week. Similarly, July 22 gas was down 9.2% at 151.25p/th, and August 22 gas decreased 4.0% to 178.08p/th. The majority of seasonal gas contracts declined this week too, down by 0.7% on average, while both winter 22 and summer 23 gas dropped 1.1% and 2.2% respectively, subsiding to 238.85p/th and 178.00p/th. Conversely, most seasonal power contracts boosted this week , up on average by 1.4%, as winter 22 power decreased 0.6% to £246.00/MWh, while summer 23 expanded 1.5% to £170.00/MWh.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 10th June 2022.
Energy Wholesale Market Review Week Ending 3rd June 2022
Wholesale gas and power prices were relatively mixed throughout last week, with losses observed on day-ahead power contract and front month contracts more generally, with gains seen further out along the forward curve – a relatively consistent trend observed in recent weeks. Day-ahead gas rose 14.7% to 133.00p/th, following periods of stronger gas-for-power demand coupled with lower Norwegian gas flows into the UK during the week. Unlike its equivalent gas contract, day-ahead power fell 12.5% to £140.00/MWh, with periods of higher wind outturn coupled with lower trending demand heading into the Jubilee bank holiday. July 22 gas was up 3.2% at 166.54p/th, and August 22 gas increased 8.1% to 185.48p/th. Elsewhere, all seasonal gas contracts boosted last week, up by 5.3% on average, while both winter 22 and summer 23 gas increased 3.8% and 6.4% respectively, lifting to 241.50p/th and 182.00p/th. Like gas, all seasonal power contracts grew last week, up on average by 3.0%, as winter 22 and summer 23 expanded 5.1% and 2.8% respectively, rising to £247.50/MWh and £167.50/MWh.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 3rd June 2022.
Written By Graham Paul
