Headlines
Predominantly bearish price movements continued last week with strong EU gas storage levels likely influencing these losses across most tracked contracts, with only the summer 27 gas contract registering a gain across both power and gas. Day-ahead gas fell 1.5% to 95.91p/th, following reduced gas-for-power demand due to above-average temperatures, coupled with healthy levels of gas supply circulating in the European gas markets. As a result, November 24 gas was down 0.8% at 98.00p/th, and December 24 gas decreased 1.4% to 99.95p/th. Most seasonal gas contracts declined last week, down by 0.9% on average, while both summer 25 and winter 25 gas dropped 1.7% and 1.7% respectively, subsiding to 92.70p/th and 99.50p/th. Similarly, day-ahead power fell 32.8% to £65.50/MWh, with increased wind generation projections due to Storm Ashley, reduced consumption forecasts into the weekend and early next week, and losses across its gas counterpart all contributing to the strong week-on-week losses seen. All seasonal power contracts declined last week, down on average by 2.7%, as summer 25 power decreased 3.3% to £73.50/MWh, and winter 25 fell 2.3% to £83.50/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 32.8% to £65.50/MWh, following above-average temperatures across GB reducing overall power demand, in tandem with losses across its gas counterpart.
- November 24 power slipped 0.3% at £85.50/MWh and December 24 power decreased 2.3% to £83.30/MWh.
Annual October contract
- Q125 power moved 1.5% lower to £88.40/MWh.
- The annual April 25 contract lost 2.8% to £78.50/MWh, 26.6% lower than the same time last year (£107.00/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 4.4% to £87.50/MWh, following its baseload counterpart lower.
- Likewise, November 24 peak power dropped 1.0% at £100.50/MWh, and December 24 peak power decreased 1.9% to £98.50/MWh.
Annual October contract
- The annual April 25 peak power fell 3.1% to £82.17/MWh.
- This is 21.0% lower than the same time last year (104.00/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts decreased week-on-week, down on average by 2.7%.
- Summer 25 power decreased 3.3% to £73.50/MWh, while winter 25 fell 2.3% to £83.50/MWh.
Seasonal peak power curve
- All seasonal peak power contracts declined last week, down 3.1% on average.
- Summer 25 and winter 25 peak power dropped 3.5% and 3.2% respectively, falling to £79.00/MWh and £96.00/MWh.
Commodity price movements
Oil and coal
- Overall, Brent crude prices fell last week, down 4.6% to average $74.60/bl.
- Price losses were fuelled by recent data from OPEC and news stories about Israeli Prime Minister Benjamin Netanyahu’s stating that his forces would not target Iranian oil facilities.
- According to OPEC’s monthly oil market report, global crude oil demand growth forecast for 2024 is revised down by 106,000 barrels per day (bpd) from the levels seen in the month previous.
- Likewise, weak Chinese manufacturing and non-manufacturing activity data released caused concern around slowing demand from the major consumer, acting to limit price gains across the reporting period.
- The outlook for oil prices remains heavily dependent on Chinese demand, and as it has the potential to grow into the future – prices are expected to rise as supply levels tighten. Moreover, any changes to the conflict in the Middle East have the potential to impact prices, leading to further volatility.
Carbon (UK and EU ETS)
- Following reduced wind generation levels, acting to increase reliance on more expensive forms of power generation, the recent trend of increasing prices continued, with both schemes registering gains, up 1.6% and 3.5% to €63.90/t and £38.87/t respectively.
- Gains across the EU ETS were supported by a reduced auction schedule across the week, due to a lack of the bi-weekly Polish auction on 16 October, acting to tighten EUA auction supply.
- Likewise, reduced coal prices acts to incentivise the use of coal-fired generation as it becomes more economical, increasing overall EUA demand due to the higher carbon emissions associated with coal burning.
- UKA demand saw a week-on-week increase stemming from reduced wind generation levels, leading to the gain seen across UK ETS prices.
- Both EU and UK carbon prices are likely to see price support in the coming weeks, as more carbon intensive means of power generation are used to match supply and demand as temperatures fall to below-average.
Wholesale price snapshot – Friday-on Friday
