Headlines
Much like the week previous, predominantly bullish fundamentals continued to impact both gas and power contracts last week, with the exception of day-ahead contracts.. Day-ahead gas fell 2.2% to 81.50p/th, following the return of the Norwegian Visund and Asgard gas fields from unplanned maintenance. Likewise, day-ahead power fell 5.7% to £54.61/MWh, seeing notable fluctuations, dropping to £18.00/MWh on 8 August, the lowest level seen since 3 July. Prices found bearish influence from strong wind generation outturn, leading to periods of negative pricing within-day. Moreover, day-ahead power prices on 9 August found further bearish pricing sentiment from projections of strong wind and solar generation forecasts for 12 August. Opposing this, September 24 gas was up 8.2% at 98.10p/th, and October 24 gas increased 8.7% to 101.88p/th. Furthermore, all seasonal gas contracts boosted last week, up by 6.3% on average, with winter 24 and summer 25 gas increasing 6.4% and 5.0% respectively, lifting to 111.25p/th and 102.93p/th. These gains are the result of escalating conflict between Russia and Ukraine, with the potential disruption of Russian gas flows via Ukraine providing an upside to longer-term gas prices. Similarly, all seasonal power contracts boosted this week, up on average by 4.2%, as winter 24 and summer 25 expanded 5.3% and 4.4% respectively, rising to £94.00/MWh and £82.00/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 5.7% to £54.61/MWh, following periods of strong wind outturn on the system.
- September 24 power increased 5.2% to £81.00/MWh and October 24 power rose 8.2% to £82.75/MWh.
Annual October contract
- Q424 power moved 5.6% higher to £91.25/MWh.
- The annual October 24 contract rose 4.9% to £88.00/MWh, 21.4% lower than the same time last year (£112.00/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 0.7% to £71.00/MWh, following its baseload counterpart lower.
- Meanwhile, September 24 peak power gained 4.7% rising to £87.00/MWh, whereas October 24 peak power decreased 0.9% to £82.75/MWh.
Annual October contract
- The annual October 24 peak power fell 2.9% to £94.17/MWh.
- This is 33.8% lower than the same time last year (142.20/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts registered gains across the reporting period, up on average by 4.2%.
- Winter 24 and summer 25 expanded 5.3% and 4.4% respectively, rising to £94.00/MWh and £82.00/MWh.
Seasonal peak power curve
- Most seasonal peak power contracts declined last week, down 2.9% on average.
- However, winter 24 gas increased 4.6% to £108.50/MWh, while summer 25 peak power dropped 2.9% to £82.00/MWh.
Commodity price movements
Oil and coal
- Brent crude oil fell1.4% to average $77.99/bl, finding influence from concerns surrounding a potential recession in the US, and the global markets by extension.
- Moreover, on 6 August, the US Energy Information Administration (EIA) outlined that global crude oil consumption would reach around 104.5m bbl/day in 2025, down 0.2m bbl/day from a previous forecast, with demand growth set to be just 1.6%.
- The downward revision comes amid concerns that China’s economy has been limited with no clear signal of notable growth.
- However, the market found bullish support after the leader of Hezbollah said his faction would deliver a “strong and effective” response to Israel for killing its military commander. As a result, the potential for this conflict to engulf larger parts of the Middle East meant that stronger losses were limited.
Carbon (UK and EU ETS)
- Similar to the week previous, UK ETS carbon experienced losses, down 1.8% to £38.31/t, and the EU ETS experienced gains, up 1.1% to €70.14/t.
- European carbon prices found support as the increased tensions in the Middle East added uncertainty to gas supply, and as a result, the price increases at the beginning of August were not driven by fundamentals necessarily, but by geopolitics.
- However, stronger gains were limited by increased renewable generation across Europe, in tandem with warmer weather conditions acting to reduce total demand, and higher coal prices meaning it was less economical to use coal-fired generation.
- UKA prices saw also losses resulting from greater wind generation on the system, acting to limit gas-for-power demand, and above-average temperatures.
Wholesale price snapshot – Friday-on Friday
