Headlines
Gas contracts saw bearish pressure last week, contrasted against a much more mixed outlook for the power markets. Despite the bearish movement in GB gas prices, day-ahead gas prices reached their highest since December 2023 at 98.75p/th on 10 October due to below average temperatures increasing gas heating requirements, paired with strong geopolitical volatility in the Middle East driving security of supply concerns. Power market gains were derived from rising demand levels due to decreasing temperatures, coupled with operational maintenance across various nuclear reactors across the GB nuclear fleet. As a result, day-ahead gas fell 0.4% to 97.39p/th, while day-ahead power rose 12.6% to £97.40/MWh. November 24 gas was down 3.3% at 98.75p/th, and December 24 gas decreased 2.9% to 101.35p/th. All seasonal gas contracts declined last week, down by 0.8% on average, while both summer 25 and winter 25 gas dropped 1.8% and 1.5% respectively, subsiding to 94.30p/th and 101.25p/th. Some seasonal power contracts saw bearish movement this week, down on average by 0.1%, however summer 25 power expanded 0.1% to £76.00/MWh, while winter 25 was stable at £85.50/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power rose 12.6% to £97.40/MWh, following increases in demand due to cooler weather and nuclear maintenance.
- November 24 power slipped 1.8% at £85.75/MWh and December 24 power decreased 2.2% to £85.25/MWh.
Annual October contract
- Q125 power moved 0.5% lower to £89.75/MWh.
- The annual April 25 contract was stable at £80.75/MWh, 27.4% lower than the same time last year (£111.25/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was up 4.8% to £91.50/MWh, following its baseload counterpart.
- November 24 peak power declined 1.7% at £101.50/MWh, and December 24 peak power decreased 1.8% to £100.40/MWh.
Annual October contract
- The annual April 25 peak power rose 0.3% to £84.78/MWh
- This is 27.2% lower than the same time last year (116.50/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts declined this week, down on average by 0.1%.
- Summer 26 power decreased 0.7% to £67.25/MWh.
Seasonal peak power curve
- All seasonal peak power contracts boosted this week, up 0.3% on average.
- Summer 25 and winter 25 peak power increased 0.1% and 0.4% respectively, rising to £81.90/MWh and £99.20/MWh.
Commodity price movements
Oil and coal
- Last week Brent crude oil saw bullish movements, rising from an average of $75.05/bl to $78.23/bl
- At the start of last week, Brent crude oil prices decreased due to US crude inventories increasing by 5.8mn barrels the week previous, alleviating heightened supply concerns from the Middle East conflict.
- Continued demand concerns over US and China oil demand also helped contribute to this bearish effect.
- However, towards the end of the week, Brent crude oil prices increased from supply concerns over Hurricane Milton, with this bullish movement being strengthened by the conflict in the Middle East.
- The US Energy Information Administration (EIA) revised its forecast for crude oil prices downwards, citing the expectation that global oil demand growth will be lower in 2025.
- Additionally, there is continued uncertainty over the future trajectory of oil prices due to geopolitical tensions in the Middle East and ongoing demand concerns.
Carbon (UK and EU ETS)
- Prices across the carbon markets registered opposing movements last week, with EU ETS registering marginal losses, whereas UK ETS saw stronger gains
- UK ETS carbon prices were supported by bolstered gas-for-heating requirements across the reporting period, acting to increase reliance on more carbon intensive forms of generation
- Losses across EU ETS prices were supported by similar losses to European gas prices throughout the week, as strong gas storage stocks across Europe limit market concerns going into the winter period
- The correlation between the EU carbon market and the coal market will get tighter as the heating season begins
- Moreover, there are only four EUA auctions taking place in the week ahead, with a lack of the bi-weekly Polish auction on 16 October providing additional bullish support
- However, these gains may be counterbalanced by above-average temperatures expected across Europe, acting to limit overall current heating demand
Wholesale price snapshot – Friday-on Friday
