Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 28th October 2022
This week saw the continuation of lowering gas and power wholesale prices as an overarching trend, with some exceptions to this on specific contracts. The bearish sentiment surrounding wholesale prices more recently can be attributed to the steady influx of LNG reaching UK and European import terminals, coupled with well stocked European gas storage levels (close to 100% fullness) as well as one of the mildest October’s on record, reducing demand. As a result, day-ahead gas fell 30.6% to 62.50p/th, amid the continuation of milder weather, suppressing demand, coupled with a steady stream of UKCS and Norwegian gas flows into GB. Like gas, day-ahead power fell 5.0% to £95.00/MWh, largely mirroring the losses seen in its equivalent gas contract. Elsewhere, November 22 gas was up 7.7% at 225.00p/th, whereas December 22 gas decreased 1.7% to 354.00p/th. All seasonal gas contracts declined this week, down by 3.2% on average, with summer 23 and winter 23 gas dropping 4.4% and 0.8% to 325.00p/th and 352.00p/th, respectively. Most seasonal power contracts declined this week, down on average by 0.2%, as summer 24 power reduced 4.3% to £220.00MWh while winter 23 remained unchanged at £315.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 28th October 2022.
Energy Wholesale Market Review Week Ending 21st October 2022
This week saw the continuation of lowering wholesale gas and power prices, a trend that has been consistent across much of October to date. A consistent level of LNG supply has helped bring down near-term gas prices, with the day-ahead contract falling to >16 month lows (40.00p/th, 18 October). Week-on-week, day-ahead gas fell 28.0% to 90.00p/th, following softened demand, amid milder temperatures, and increased levels of LNG imports into GB. Day-ahead power fell 33.3% to £100.00/MWh, mirroring the losses seen from its equivalent gas contract and driven lower by higher wind output seen during the week. November 22 gas was down 22.0% at 209.00p/th, and December 22 gas decreased 12.2% to 360.00p/th. Like near-term contracts, forward seasonal gas contracts declined this week too, down by 5.6% on average, with summer 23 gas and winter 23 gas dropping 7.6% and 5.8% respectively, subsiding to 340.00p/th and 355.00p/th. Elsehwere, most seasonal power contracts declined this week, down on average by 3.3%, as summer 23 power decreased 4.9% to £290.00/MWh, while winter 23 fell 4.5% to £315.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 21st October 2022.
Energy Wholesale Market Review Week Ending 14th October 2022
This week saw predominately bearish price movements for wholesale gas and power contracts in GB. We continue to observe volatility particularly in nearer-term contracts, but with the general pricing sentiment over recent weeks largely trending downwards. Day-ahead gas fell 25.1% to 125.00p/th, taking direction from lowering prices on the continent towards the end of the week as EU gas storage levels reach near 100% fullness. Day-ahead power fell 6.3% to £150.00/MWh, driven in part by bearish movements across near-term gas and carbon contracts. Similarly, November 22 gas was down 7.8% at 268.00p/th, and December 22 gas decreased 6.3% to 410.00p/th. All seasonal gas contracts declined last week, down by 3.2% on average, while both summer 23 and winter 23 gas dropped 2.3% and 5.3% respectively, subsiding to 368.00p/th and 377.00p/th. Like their equivalent gas contract, all seasonal power contracts declined this week, down on average by 3.6%, as summer 23 power decreased 6.2% to £305.00/MWh, while winter 23 fell 4.3% to £330.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 14th October 2022.
Energy Wholesale Market Review Week Ending 7th October 2022
This week saw predominately bearish price movements for wholesale gas and power contracts in GB, but with some exceptions. We continue to observe volatility particularly in nearer-term contracts, but with some levels of volatility also feeding into longer dated contracts. In GB, a strong influx of LNG imports continues to soften the near-term supply/demand balance, with continued price reductions on the near-term throughout much of September into early October. Day-ahead gas fell 3.2% to 167.00p/th this week, following consistent levels of UKCS domestic gas production in tandem with steady levels of flows received from Norway. Following gas, day-ahead baseload power saw losses week-on-week, down 28.9% to average £160.00/MWh, following an uptick in forecast wind output towards the week’s end. The majority of seasonal gas contracts declined on average this week, falling 6.0% on average, with summer 23 gas slipping 13.4% to 376.50p/th and winter 23 declining 12.5% to 398.25p/th. Like gas, seasonal power contracts shared collectively downward price movements, a 7.8% reduction on average. Winter 23 saw the largest losses week-on-week, falling 11.5%.
Wholesale price snapshot
Energy Wholesale Market Review Week Ending 7th October 2022.
Written By Graham Paul
