Headlines
It was a bearish week for gas and power contracts last week, opposing the trend of relative increases across wholesale prices observed across much of 2024 to date. Day-ahead gas fell 6.1% to 73.25p/th, influenced by reduced maintenance works across the UK Continental Shelf, bolstering flows into GB from our indigenous gas sources. Moreover, lower prices were influenced by similar drops across LNG prices. Similarly, day-ahead power dropped 9.2% to £73.29/MWh, taking direction from losses made in near-term gas markets, despite reduced wind output during the week – acting to increase the reliance on more expensive forms of power generation August 24 gas was down 5.2% at 73.13p/th, and September 24 gas decreased 5.2% to 77.65p/th. All seasonal gas contracts fell last week, down by 2.5% on average, with winter 24 and summer 25 gas falling 3.3% and 3.0%, to 94.70p/th and 88.30p/th respectively. Likewise, all seasonal power contracts traded lower, down on average by 4.7%. Winter 24 and summer 25 power went down 4.6% and 5.8% respectively, falling to £83.50/MWh and £72.50/MWh. Brent crude oil subsided this week, falling from the gains seen in the week prior. Subsequently, prices were 1.6% lower at $85.49/bl. The EU ETS registered losses last week too, down 2.8% to €68.68/t, and the UK ETS followed this, down 8.3% to £42.40/t.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 9.2% to £73.29/MWh, following the losses seen across its gas counterpart, with lower levels of maintenance across the UK Continental Shelf bolstering gas supply into GB in tandem with lower demand across the summer period.
- August 24 power slipped 6.1% to £65.00/MWh and September 24 power decreased 7.0% to £70.25/MWh.
Annual October contract
- Q424 power moved 5.3% lower to £80.50/MWh.
- The annual October 24 contract lost 5.2% to £78.00/MWh, 29.7% lower than the same time last year (£111.00/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 11.1% to £71.75/MWh, following its baseload counterpart lower.
- August 24 peak power declined 14.5% at £65.00/MWh, and September 24 peak power decreased 12.7% to £70.25/MWh.
Annual October contract
- The annual October 24 peak power fell 3.9% to £91.20/MWh.
- This is 39.6% lower than the same time last year (151.00/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts dropped across the week, down on average by 4.7%.
- Winter 24 power decreased 4.6% to £83.50/MWh, while summer 25 fell 5.8% to £72.50/MWh.
Seasonal peak power curve
- All seasonal peak power contracts declined last week, down 4.0% on average.
- Winter 24 and summer 25 peak power dropped 3.0% and 5.2% respectively, falling to £98.50/MWh and £77.75/MWh.
Commodity price movements
Oil and coal
- Brent crude oil saw bearish movements across the reporting period, down 1.6% to $85.49/bl, opposing the movements seen across the week previous, following the prospect of a potential ceasefire in the Middle East acting to limit the geopolitical price drivers, in tandem with continued weak oil demand from China.
- However, stronger losses were limited by data released on 11 July showed that US consumer prices fell across June, increasing speculation that the Federal Reserve will cut interest rates soon.
- Likewise, the market also continued to assess the potential disruption to US energy supplies due to the arrival of Hurricane Beryl.
- On 9 July, the IEA announced that it had reversed its prior forecast of a supply surplus, and outlined that global oil demand is set to outpace supply in 2025 following OPEC+ extending their oil output cuts into next year.
Carbon (UK and EU ETS)
- Last week, both carbon schemes saw losses on average, with the UK ETS dropping 8.3% to £42.40/t and the EU ETS falling 2.8% to €68.68/t, as the summer holiday season acts to limit total demand.
- Although an overall loss was recorded, both ETS schemes experienced day-on-day fluctuations over the reporting period, amid periods of lower temperatures and wind generation across much of Europe and the UK.
- Stronger losses across EU ETS carbon prices were limited by reduced coal prices throughout the reporting period. As a result, coal-fired generation was more economical, leading to more output from carbon-intensive forms of power generation.
- Forecasts of an upcoming heatwave across Europe in the week ahead means that carbon prices could find support from increased power demand for cooling appliances, bolstering EUA demand by extension.
Wholesale price snapshot – Friday-on Friday
