Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 25th August 2023
This week, we observed mixed price movements. Largely, all gas contracts recorded losses, with day-ahead being the exception - rising 4.9% to 86.00p/th, following lower day-ahead wind outturn projections boosting gas-for-power demand forecasts. Similarly, day-ahead power rose 5.7% to £93.00/MWh, finding support from its gas counterpart, however gains were subdued by reduced day-ahead demand forecasts. . September 23 gas was down 6.5% at 86.00p/th, and October 23 gas decreased 11.8% to 92.60p/th, with all seasonal gas contracts declining last week, by an average of 8.4%. This arose due to the announcement in the latter half of the week outlining that strike action at Australian LNG plants would be averted – providing stability to longer-term contracts. Winter 23 and summer 24 gas dropped 7.4% and 5.9% respectively, subsiding to 126.00p/th and 128.00p/th. Most seasonal power contracts recorded growth this week, up on average by 1.0%, as winter 23 power decreased 2.9% to £120.85/MWh, summer 24 fell 2.8% to £113.25/MWh, whereas summer 25 rose 12.5% to £108.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 25th August 2023.
Energy Wholesale Market Review Week Ending18th August 2023
This week, gas and power prices saw bullish sentiment further along the forward curve, as uncertainty surrounding Australian LNG supply remains elevated amid potential strike action that could impact European energy markets. However, across most short-term contracts, bearish prices trends were captured as day-ahead gas fell 4.1% to 82.00p/th, amid an oversupplied GB system. Conversely day-ahead power rose 1.1% to £88.00/MWh, opposing the bearish momentum seen in its equivalent gas contract, seeing low wind output across the week, in conjunction with growing power demand acting to tighten system margins. September 23 gas was down 2.1% at 92.00p/th, and October 23 gas increased 2.4% to 105.00p/th. Seasonal gas contracts boosted by an average of 3.8% this week, with winter 23 and summer 24 gas increasing 5.4% and 4.6% respectively, lifting both to 136.00p/th. Most seasonal power contracts traded higher this week, up on average by 2.9%, as winter 23 and summer 24 expanded 3.1% and 4.0% respectively, rising to £124.50/MWh and £116.50/MWh. Summer 25 remained level at £96.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending18th August 2023.
Energy Wholesale Market Review Week Ending11th August 2023
This week favoured a bullish outcome for gas and power prices, both in the near-term and further along the forward curve – underpinned by the uncertainty surrounding future gas imports into European energy markets from potential strike action at Australian LNG terminals. Day-ahead gas rose 21.7% to 85.50p/th, following uncertain Australian LNG supplies – the effect of this being heightened by Europe’s increased reliance on the global LNG market. Day-ahead power rose 14.5% to £87/MWh, following the bullish momentum gained from its equivalent gas contract, and a reduction in day-ahead wind forecasts. September 23 gas was up 28.4% at 94.00p/th, and October 23 gas increased 22.0% to 102.50p/th. All seasonal gas contracts boosted this week, up by 7.4% on average, as both winter 23 and summer 24 gas increased 12.2% and 7.9% respectively, lifting to 129.00p/th and 130.00p/th. Larger gains across seasonal gas contracts have been limited by above-average EU gas storage levels, acting to mitigate stronger increases. All seasonal power contracts traded higher this week, up on average by 4.5%, as winter 23 and summer 24 expanded 7.8% and 6.2% respectively, rising to £120.75/MWh and £112.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending11th August 2023.
Energy Wholesale Market Review Week Ending 4th August 2023
This week represented a relatively mixed outcome for gas and power prices, with conflicting market fundamentals dictating the movement of prices. Firstly, day-ahead gas rose 9.8% to 70.25p/th as plant maintenance at Troll and Kollsnes acts to reduce Norwegian flows and tighten gas supplies. Similarly, day-ahead power rose 8.6% to £76.00/MWh, supported by lower wind outturn and increased demand. Elsewhere, September 23 gas was up 8.4% at 73.20p/th, and October 23 gas increased 5.1% to 84.00p/th. Opposing this, most seasonal gas contracts declined last week, down by 1.0% on average - while both winter 23 and summer 24 gas dropped 1.5% and 1.6% respectively, subsiding to 115.00p/th and 120.50p/th. This comes following strong EU gas storage levels, acting to provide relative stability to seasonal contracts. All seasonal power contracts declined this week, down on average by 1.9%, as winter 23 power decreased 1.3% to £112.00/MWh, while summer 24 fell 2.3% to £105.50/MWh. Carbon markets saw a bearish sentiment from the week previous as UK ETS prices fell to a record low of £40.25/t on Thursday. Similarly, EU ETS carbon saw a 5.8% drop to €85.64/t.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 4th August 2023.
Written By Graham Paul
