Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 29th September 2023
This week, gas and power prices saw bearish sentiment further along the forward curve, as uncertainty surrounding Australian LNG supply lowered following a resolution to strike action at the Wheatstone and Gorgon gas terminals, in tandem with strong EU gas storage levels providing a solid foundation for winter energy security. Similar bearish price trends were captured on short-term gas contracts as day-ahead gas fell 4.0% to 97.00p/th, amid bolstered Norwegian flows as maintenance works at select Norwegian gas fields ended. Conversely, day-ahead power rose 33.8% to £95.00/MWh, opposing the bearish momentum seen in its equivalent gas contract, amid lower wind generation forecasts for Monday acting to tighten system margins. October 23 gas was down 3.4% at 98.50p/th, and November 23 gas decreased 4.5% to 107.20p/th. Seasonal gas contracts reduced by an average of 4.9% this week, with winter 23 and summer 24 gas falling 5.3% and 6.8% respectively, subsiding to 117.45p/th and 117.00p/th. All seasonal power contracts traded lower this week, down on average by 3.8%, as both winter 23 and summer 24 declined 4.5% to £106.50/MWh and £101.25/MWh respectively.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 29th September 2023.
Energy Wholesale Market Review Week Ending 22nd September 2023
This week, gas prices saw bullish sentiment across shorter-term contracts, despite improving pipeline supply as major maintenance across Norwegian gas fields subsides, and a resolution being reached at LNG facilities in Australia – ending industrial strike action. Upwards price trends were showcased as day-ahead gas rose 18.3% to 101.00p/th, amid an undersupplied GB system in periods across the reporting week. Conversely, day-ahead power dropped 11.8% to £71.00/MWh, opposing the rising momentum seen in its equivalent gas contract, despite low wind generation forecasts typically tightening system margins. October 23 gas was up 16.9% at 102.00p/th, and November 23 gas increased 3.0% to 112.20p/th. Overall seasonal gas contracts remained relatively unchanged this week, as the 2.1% gain to winter 23 gas (124.00p/th) was offset – with summer 24 and winter 24 gas decreasing 0.4% and 0.7%, falling to 125.50p/th and 141.00p/th respectively and summer 25 and winter 25 also registering losses. The majority of seasonal power contracts traded lower this week, down on average by 1.0%, as winter 23 and summer 24 fell 0.2% and 1.9% respectively, dropping to £111.50/MWh and £106.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 22nd September 2023.
Energy Wholesale Market Review Week Ending 15th September 2023
It was a largely 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 1.9% to 85.35p/th, following periods of above-average temperature during the week. However, losses were limited by extended maintenance works across the Norwegian Continental Shelf, limiting flows into GB from Norway. Likewise, day-ahead power dropped 12.5% to £80.50/MWh, taking direction from losses made in near-term gas markets and increased wind output during the week – loosening system margins. October 23 gas was down 1.7% at 87.25p/th, and November 23 gas decreased 3.2% to 108.90p/th. Most seasonal gas contracts fell this week too, down by 1.7% on average, with winter 25 the exception – seeing a 0.4% gain. Winter 23 and summer 24 gas dropped 2.0% and 1.9% respectively, subsiding to 121.50p/th and 126.00p/th. All seasonal power contracts traded lower this week, down on average by 1.9%. Winter 23 and summer 24 power went down 2.4% and 2.7% respectively, falling to £111.75/MWh and £108.00/MWh. Brent crude oil reached a 10 month high this week, following OPEC+ supply cuts anticipated to last until the end of the year. Subsequently, prices were 3.0% higher at $93.90/bl. Meanwhile, UK ETS prices dropped to the lowest level since the scheme opened in May 2021, at £38.75/t.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 15th September 2023.
Energy Wholesale Market Review Week Ending 8th September 2023
Wholesale gas contracts experienced mixed price movements this week, whereas all tracked power contracts, with day-ahead and October 23 baseload the exception, registered week-on-week price losses. Subsequently, day-ahead gas rose 8.7% to 87.00p/th, in anticipation of supply reduction due to planned industrial action at Chevron's Australian LNG facilities, in tandem with reduced Norwegian exports following extended maintenance at the Troll gas field. Similarly, day-ahead power rose 9.5% to £92.00/MWh, with upward price movement attributed, in part, to lower wind outturn during the week, and gains across its gas counterpart. Unlike the day-ahead baseload power contract, the front month contracts experienced bearish sentiment – with October 23 remaining level at £86.00/MWh, and November 23 power decreasing 2.7% to £108.00/MWh. Similar downward price movements were seen across all seasonal power contracts, falling on average by 2.7%, with winter 23 down 3.0% to £114.50/MWh and the summer 24 contract dropping 2.6% to £111.00/MWh. Likewise, most individual seasonal gas contracts decreased this week, however seasonal gas contracts recorded an overall gain - up by 0.4% on average. Both summer 24 and winter 24 gas dropped 0.2% and 0.9% respectively, subsiding to 128.50p/th and 143.75p/th – whereas summer 25 rose 2.6% to 114.90p/th.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 8th September 2023.
Energy Wholesale Market Review Week Ending 1st September 2023
This week, gas and power prices saw bullish sentiment further along the forward curve, as uncertainty surrounding gas supply during the winter period remains elevated. As of September 01, planned work stoppages across Australian LNG terminals are anticipated as workers at Chevron rejected the company’s pay offer, impacting output from the Gorgon and Wheatstone terminals. Similarly, the potential for a colder-than-anticipated winter period bakes risk into these contracts. However, across most short-term contracts, bearish prices trends were captured as day-ahead gas fell 7.0% to 80.00p/th, amid expectations of higher wind generation decreasing demand from gas-fired assets to support power generation. Likewise, day-ahead power fell 9.7% to £84.00/MWh, following the bearish momentum seen in its equivalent gas contract, as rising temperatures and increased renewable generation act to loosen system margins. October 23 gas was down 8.2% at 85.00p/th, and November 23 gas decreased 3.7% to 112.00p/th. Most seasonal gas contracts boosted this week, with summer 24 gas increasing 0.6% and winter 24 growing 2.1% to 128.75p/th, and 145.00p/th respectively. Summer 25 experienced the largest gain of 16.7% to average 112.00p/th, whereas winter 23 recorded a 1.6% loss to 124.00p/th. This led to an overall gain of 4.4% across seasonal gas contracts. A mixed sentiment was observed across individual seasonal power contracts as winter 23 and summer 25 decreased 2.4% and 9.3% respectively, dropping to £118.00/MWh and £98.00/MWh – and summer 24 and winter 24 rose 0.7% and 1.5% respectively to 114.00/MWh and 132.00/MWh. This led to an overall 2.4% decrease across seasonal power contracts this week.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 1st September 2023.
Written By Graham Paul
