Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 27th October 2023
Predominantly bearish gas price movements continued this week – with consistent losses seen across most tracked contracts, a likely consequence of the continued strong EU gas storage levels, at approximately 99% full at the time of writing. However, day-ahead gas was one exception to this bearish trend, rising 4.3% to 118.95p/th, despite falling demand forecasts and rising wind outturn projections, lowering gas-for-power demand. November 23 gas was down 0.2% at 128.00p/th, and December 23 gas decreased 3.8% to 139.50p/th. Most seasonal gas contracts declined last week, down by 1.8% on average, as both summer 24 and winter 24 gas dropped 4.4% and 2.6% respectively, subsiding to 135.50p/th and 150.00p/th, whereas summer 26 gas rose 0.4% to 93.33p/th. Opposing its gas counterpart, Day-ahead power fell 8.7% to £95/MWh, finding bearish support from increased wind generation levels, further reducing gas-for-power demand. All seasonal power contracts declined this week, down on average by 5.2%, as summer 24 power decreased 6.7% to £111.00/MWh, and winter 24 fell 4.6% to £128.25/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 27th October 2023.
Energy Wholesale Market Review Week Ending 20th October 2023
This week power and gas contracts broadly continued to follow the bearish trend seen across much of 2023 to date, inclusive of longer-term contracts. We observed above average wind generation for large periods across the reporting window – acting to supress gas-fired generation demand, and the announcement that strike action across Australian LNG terminals will not go ahead, acting to loosen constraints on global supply. Subsequently, day-ahead gas fell 15.6% to 114.00p/th, despite the expectation of both higher heating demand as well as forecast increases in gas-for-power demand, as we progress into next week. Following its gas counterpart lower, day-ahead power fell 20.0% to £104.00/MWh, despite tightened system margins projections for early next week. November 23 gas was down 7.7% at 128.25p/th, and December 23 gas decreased 1.7% to 145.00p/th. Most seasonal gas contracts declined last week, down by 0.1% on average, as summer 24 gas dropped 0.6% to 141.80p/th, whereas winter 24 gas increased 0.7% to 154.00p/th. All seasonal power contracts declined this week, down on average by 3.5%, as summer 24 power decreased 3.6% to £119.00/MWh, and winter 24 fell 2.5% to £134.50/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 20th October 2023.
Energy Wholesale Market Review Week Ending 13th October 2023
All gas and power contracts increased this week, with the most prominent gains registered across the day-ahead and shorter-term power and gas contracts. Gas contracts were pushed higher following supply concerns amid persistent strike action at LNG facilities in Australia, alongside fears over the security of key European gas infrastructure following the damage to the Baltic Connector gas pipeline. Wider geopolitical concerns linked to the Israel-Hamas conflict have also aided bullishness. This fuelled concerns of potential tight supply margins with prices driven further still by rising demand amid forecast colder temperatures into the weekend. As a result day-ahead, gas rose 97.1% to 135.00p/th, November 23 gas was up 49.0% at 139.00p/th, and December 23 gas increased 34.7% to 147.50p/th. All seasonal gas contracts boosted last week, up by 17.5% on average, while both summer 24 and winter 24 gas increased 30.0% and 21.2% respectively, lifting to 142.70p/th and 153.00p/th. Power prices followed the gas market higher, with day-ahead power rising 75.7% to £130.00/MWh, driven by strike action at several French nuclear power stations and low wind forecasts in parallel. All seasonal power contracts boosted this week, up on average by 17.4%, as summer 24 and winter 24 expanded 26.0% and 19.5% respectively, rising to £123.50/MWh and £138.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 13th October 2023.
Energy Wholesale Market Review Week Ending 6th October 2023
This week, most tracked contracts registered losses, as strong EU gas storage levels continue to remain a prominent driver of prices ahead of the winter period. Similarly, LNG prices are likely to remain stable over the coming winter amid ample gas inventories in both Europe and Asia. Due to LNG’s status as the marginal price setter for the UK, stability across supply may act to keep prices down. As a result, day-ahead gas dropped 29.4% to 68.50p/th, and all seasonal gas prices fell, down by 5.1% on average with both summer 24 and winter 24 gas shrinking 6.2% and 4.9% respectively, subsiding to 109.75p/th and 126.25p/th. Following its gas counterpart, day-ahead power dropped 22.1% to £74.00/MWh, despite lower wind generation projections and rising demand forecasts for Monday. November 23 gas was down 13.0% at 93.30p/th, and December 23 gas decreased 8.9% to 109.50p/th. All seasonal gas contracts reduced this week, by an average of 5.1%. Summer 24 and winter 24 gas fell 6.2% and 4.9% to 109.75p/th and 126.25p/th, respectively. All seasonal power contracts traded lower this week, down on average by 4.2%, as summer 24 power declined 3.2% to £98.00/MWh, while winter 24 power fell 2.5% £115.50/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 6th October 2023.
Written By Graham Paul
