Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 28th July 2023
It was a bearish week for gas and power contracts this week, continuing the trend of decreasing wholesale prices observed across much of 2023. Day-ahead gas fell 10.5% to 64.00p/th, following periods of above-average temperature during the week and buoyed by reduced maintenance works across the Norwegian Continental Shelf, bolstering flows into GB from Norway. Day-ahead power dropped 16.7% to £70.00/MWh, taking direction from losses made in near-term gas markets and increased wind output during the week – loosening system margins. August 23 gas was down 11.1% at 65.40p/th, and September 23 gas decreased 11.8% to 67.50p/th. All seasonal gas contracts fell this week, down by 6.5% on average, with winter 23 and summer 24 gas falling 9.2% and 7.2%, to 116.70p/th and 122.50p/th respectively. All seasonal power contracts traded lower this week, down on average by 5.3%. Winter 23 and summer 24 power went down 7.0% and 6.1% respectively, falling to £113.50/MWh and £108.00/MWh. Brent crude oil rebounded this week, rising from losses seen in the week prior. Subsequently, prices were 4.6% higher at $83.06/bl. The EU ETS registered gains this week, up 2.8% to €90.86/t, however the UK ETS opposed this bullish sentiment, down 2.2% to £47.98/t.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 28th July 2023.
Energy Wholesale Market Review Week Ending 21st July 2023
Most power and gas contracts rose this week, following low periods of wind outturn, flow interruptions from Norwegian gas fields and an outage at Tolmount gas field which restricted UK Continental Shelf flows, all acting to tighten system margins. Subsequently, day-ahead gas rose 6.7% to 71.50p/th, amid lower renewable forecast output for next week, increasing gas for power demand and tightening margins. Day-ahead power rose 5.0% to £84.00/MWh, following its gas counterpart higher, buoyed by increasing demand projections for next week. Similarly, August 23 gas was up 7.8% at 73.60p/th, and September 23 gas increased 4.4% to 76.50p/th. All seasonal gas contracts boosted last week, up by 4.5% on average, while both winter 23 and summer 24 gas increased 7.1% and 9.1% respectively, lifting to 128.50p/th and 132.00p/th. All seasonal power contracts boosted this week, up on average by 4.5%, as winter 23 and summer 24 expanded 2.5% and 4.5% respectively, rising to £122.00/MWh and £115.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 21st July 2023.
Energy Wholesale Market Review Week Ending 14th July 2023
Wholesale gas and power prices saw downward price movements throughout the week in GB, with European strong gas storage levels and increased Norwegian and UK Continental Shelf flows acting to soften margins, resulting in all power and gas contracts falling. Day-ahead gas fell 15.2% to 67.00p/th, following the expectation that the remaining Norwegian gas field outages may be coming to an end. Similarly, day-ahead power fell 5.9% to £80.00/MWh, following its gas counterpart, however losses were mitigated by forecasts of low wind outturn next week. August 23 gas was down 15.2% at 68.25p/th, and September 23 gas decreased 15.3% to 73.25p/th. All seasonal gas contracts declined last week, down by 5.9% on average, with both winter 23 and summer 24 gas dropping 9.4% and 7.3% respectively, subsiding to 120.00p/th and 121.00p/th. All seasonal power contracts declined this week too, down on average by 5.4%, as winter 23 power decreased 7.0% to £119.00/MWh, while summer 24 fell 5.2% to £110.00/MWh.
Wholesale price snapshot - Firday-on-Friday
Energy Wholesale Market Review Week Ending 14th July 2023.
Energy Wholesale Market Review Week Ending 7th July 2023
Wholesale gas and power prices were relatively mixed throughout the week, with losses recorded across shorter-term contracts, day-ahead baseload power being the exception. Front-month contracts across gas and power recorded losses, buoyed by strong EU gas storage levels and above-average temperatures reducing demand. This resulted in the 7.0% drop experienced across day-ahead gas, falling to 79.00p/th. However, day-ahead power diverted from the trend set by its gas counterpart and registered a 34.9% gain week-on-week to £85.00/MWh, supported by forecasts of reduced wind generation into next week. Elsewhere, August 23 gas was down 7.9% at 80.50p/th, and September 23 gas decreased 9.7% to 86.50p/th. All seasonal gas contracts increased this week though, up by 3.3% on average - while both winter 23 and summer 24 gas increased 1.1% and 3.2% respectively, lifting to 132.50p/th and 130.50p/th. Like gas, the majority of seasonal power contracts saw gains up on average by 1.2% as summer 24 expanded 2.2% to £116.00/MWh, and winter 24 grew 1.1% to £133.00/MWh. Gains observed further into the forward curve are indicative of the level of risk being priced into future delivery with energy supply uncertainties remaining a prominent lever.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 7th June 2023.
Written By Graham Paul
