Headlines
Most long-term power and gas contracts fell this week, with day-ahead power acting as the only exception to the bearish movement across the week. Day-ahead gas fell 2.4% to 85.60p/th, posting minor losses despite easing temperatures and lower wind outturn generation for the week. Day-ahead gas reached a weekly high of 87.95p/th on 11 September, which was attributed to a drop in temperatures on that day with forecasts outlining that temperatures would further decrease on 12 September – bolstering gas-for-heating requirements across GB. Day-ahead power rose 5.5% to £85.75/MWh, with bullish influence from low levels of wind generation, as well as higher gas-for-heating demand due to lower temperatures across GB. October 24 gas was down 2.4% at 86.10p/th, and November 24 gas decreased 3.1% to 93.65p/th. All seasonal gas contracts declined last week, down by 2.9% on average, while both winter 24 and summer 25 gas dropped 3.2% and 3.8% respectively, subsiding to 95.43p/th and 89.75p/th. All seasonal power contracts registered losses this week, down on average by 2.5%, as winter 24 power decreased 2.3% to £84.50/MWh, while summer 25 fell 3.4% to £73.70/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power rose 5.5% to £85.75/MWh, following easing levels of wind generation for the week.
- October 24 power slipped 2.2% at £72.8/MWh and November 24 power decreased 3.3% to £84.5/MWh.
Annual October contract
- Q424 power moved 2.4% lower to £80.5/MWh.
- The annual October 24 contract lost 2.8% to £79.1/MWh, 28.4% lower than the same time last year (£110.5/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was up 26.1% to £87.50/MWh, following its baseload counterpart.
- October 24 peak power declined 0.9% at £81.8/MWh, and November 24 peak power decreased 2.2% to £101.5/MWh.
Annual October contract
- The annual October 24 peak power rose 2.9% to £92/MWh
- This is 39.4% lower than the same time last year (151.75/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined this week, down on average by 2.5%.
- Winter 24 power decreased 2.3% to £84.50/MWh, while summer 25 fell 3.4% to £73.70/MWh.
Seasonal peak power curve
- All Seasonal peak power contracts declined this week, down 2.9% on average.
- Winter 24 and summer 25 peak power dropped 3.0% and 3.0% respectively, falling to £98.50/MWh and £79.70/MWh.
Commodity price movements
Oil and coal
- Brent crude oil saw sustained bearish movements, continuing with the strong downward movements observed over the previous reporting period.
- At the beginning of the week, brent crude oil prices fell due to persistent demand concerns, with prices going below $70 for the first time since August 2021, reaching the lowest level of $69.49/bl on 10 September.
- On Tuesday, OPEC stated that world oil demand is expected to rise by 2mn bbl/day in 2024, down 80,000 bbl/day compared to its August forecast.
- However, following concerns about US oil production from Hurricane Francine and ongoing oil disruptions in Libya, prices rose back to a similar level seen at the end of last week, offsetting sustained Chinese demand concerns.
- Whilst concerns about Hurricane Francine have eased, the oil market will continue to be volatile due to the conflict in the Middle East as well as reduced oil demand in China and the US.
Carbon (UK and EU ETS)
- The UK ETS experienced marginal losses, down 0.02% week-on-week, and the EU ETS also fell, reaching the lowest level seen since July 2024 at €66.19/t on 5 September.
- Reduced heating demand due to above-average temperatures were counterbalanced by periods of reduced wind generation acting to increase gas-for-power demand.
- European carbon prices remain coupled to the movements seen across the Dutch TTF market, and due to strong gas storage stocks across the EU, prices registered losses. However, stronger losses were limited by reduced coal prices, acting to increase EUA demand as coal-fired generation becomes more economical.
- The upcoming EUA compliance deadline on 30 September may provide some bullish fundamentals to the EU ETS market as participants look to close their position
- Moreover, as we progress further into the autumn season, auction demand will likely see an increase, which will likely contribute to a boost in carbon prices
Wholesale price snapshot – Friday-on Friday
