Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 26th August 2022
All gas and power contracts increased this week, with many longer-term contracts hitting all-time highs. Gas contracts along the curve were pushed higher following news that Nord Stream 1 will shut down for three days of maintenance at the end of August. This fuelled concerns of tight supply margins, with Norwegian gas fields and processing plants set to enter a heavy maintenance period in September. Day-ahead gas jumped 43.4% to 545.00p/th. September 22 gas climbed 25.2% to 575.92p/th and October 22 gas rose 22.0% to 641.78p/th. Seasonal gas contracts gained 24.8% on average. Winter 22 gas surged 26.8% to 766.55p/th, while summer 23 gas lifted 25.1% to 682.43p/th. Power prices followed the gas market higher, while low hydro levels in Europe and French nuclear outages continued to provide price support. Day-ahead power rose 25.0% to £500.00/MWh. September 22 power increased 25.4% to £535.00/MWh and October 22 power gained 27.3% to £630.00/MWh. Seasonal power contracts jumped 18.3% on average. Winter 22 power climbed 24.0% to £800.00/MWh and summer 23 power moved 21.7% higher to £545.00/MWh. Brent crude oil rose 6.2% to average $99.77/bl, while UK ETS carbon edged 1.9% higher to average £95.02/t.
Wholesale price snapshot – Friday-on Friday
Energy Wholesale Market Review Week Ending 26th August 2022
Energy Wholesale Market Review Week Ending 19th August 2022
Bullish gas price movements continued this week – with consistent gains seen across all tracked contracts – a likely consequence of the continued uncertatinty surrounding Russian gas flows into Europe as we move closer towards the winter season. Subsequently, day-ahead gas rose 11.8% to 380.00p/th, supported by periods of lower Norwegian flows into GB as maintenance works on the Norwegian Continental Shelf continued. Similarly, September 22 gas was up 16.8% at 460.09p/th, and October 22 gas increased 19.6% to 526.08p/th. All seasonal gas contracts rose by 20.8% on average, with both winter 22 and summer 23 gas rising 19.0% and 21.2% respectively, lifting to 604.48p/th and 545.55p/th. Like gas, wholesale power contracts shared week-on-week price increases both on shorter-dated contracts and further out on the forward curve too. Day-ahead power rose 23.1% to £400.00/MWh, following gains set from its equivalent gas contract and periods of low wind outturn coupled with higher gas-for-power demand at select periods in the week. All seasonal power contracts boosted this week too, up on average by 19.8%, as winter 22 and summer 23 expanded 9.1% and 21.1% respectively, rising to £645.00/MWh and £448.00/MWh.
Wholesale price snapshot – Friday-on Friday
Energy Wholesale Market Review Week Ending 19th August 2022.
Energy Wholesale Market Review Week Ending 12th August 2022
Bullish pricing sentiment for GB wholesale gas continued this week – with the most pronounced gains observed from winter 22 and beyond further into the forward curve, indicative of the level of risk being priced into future delivery with energy supply uncertainties remaining a prominent lever. Subsequently, day-ahead gas rose 19.3% to 340.00p/th, following increased gas-for-power demand for cooling during the second heatwave period this summer for GB, and expectations of upcoming Norwegian maintenance works which will reduce flows into GB. Against the largely bullish trends set elsewhere, near-term power contracts fell or remained broadly unchanged. As such, day-ahead power remained virtually unchanged at £325.00/MWh, despite price movements throughout the week. Higher price points remain, with elevated levels of demand during the heatwave. Elsewhere, September 22 gas was up 4.3% at 394.00p/th, and October 22 gas increased 3.6% to 440.00p/th. All seasonal gas contracts climbed this week, up by 22.5% on average, as winter 22 and summer 23 gas increased 7.9% and 25.4% respectively, lifting to 508.00p/th and 450.00p/th. Like gas, all seasonal power contracts rose this week, up on average by 15.3%. Winter 22 and summer 23 gained 2.4% and 17.8% to £591.00/MWh and £370.00/MWh, respectively.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 12th August 2022.
Energy Wholesale Market Review Week Ending 5th August 2022
Weekly gains were seen across most tracked gas and power contracts this week. The exception to this trend was observed in day-ahead gas which saw prices fall 7.5% to 285.00p/th. Day-ahead gas prices eased amid periods of system oversupply and on the expectation of higher Norwegian production early next week. In contrast, Day-ahead power increased 4.8% to £325.00/MWh, with French nuclear supply issues ongoing, and with the news that Norway is considering limiting interconnector exports this winter. Forward gas contracts were bullish amid ongoing uncertainty about Russian gas supplies along Nord Stream 1, though gains were pegged back by healthy LNG arrivals. September 22 gas rose 1.3% to 377.77p/th, while October 22 gas traded 6.3% higher at 424.84p/th. Seasonal gas contracts continue to extend their upward price trajectory, increasing on average by 10.9% out to Summer 24. Elsewhere, September 22 power gained 4.2% to £370.00/MWh, and October 22 power went up 14.0% to £435.00/MWh. Meanwhile, seasonal power contracts increased by 9.8% on average this week.
Wholesale price snapshot – Friday-on Friday
Energy Wholesale Market Review Week Ending 5th August 2022.
Written By Graham Paul
