Headlines
Broadly bullish price movements were seen across longer-term contracts in the gas and power markets last week, with the day-ahead contracts as the exception, registering losses. Day-ahead gas fell 2.2% to 114.50p/th, with strong volatility in the week as the contract reached a yearly high on 21 November of 121.50p/th, due to below seasonal average temperatures increasing domestic heating demand. However, this bullish movement was subsequently limited by the increase in wind generation during Storm Bert, easing to 114.50p/th on 22 November. Day-ahead power fell 36.3% to £66.00/MWh on 22 November, a monthly low as Storm Bert increased the rates of available wind generation, thereby reducing reliance on more expensive fuelled generation. Opposing the movements seen at the day-ahead level, longer-dated contracts saw gains as December 24 gas rose 0.5% to116.50p/th, and January 25 gas increased 1.6% to 118.60p/th. Likewise, all seasonal gas contracts boosted last week, up by 1.4% on average, with both summer 25 and winter 25 gas increasing 2.2% and 0.8% respectively, lifting to 109.90p/th and 106.35p/th. Most seasonal power contracts registered gains this week, up on average by 0.3%, as summer 25 and winter 25 expanded 1.5% and 0.2% respectively, rising to £84.50/MWh and £88.50/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 36.3% to £66.00/MWh, following strong rates of wind generation due high wind speeds during Storm Bert.
- December 24 power slipped 1.1% at £95.25/MWh and January 25 power increased 1.0% to £102.75/MWh.
Annual October contract
- Q125 power moved 1.2% higher to £100.50/MWh.
- The annual April 25 contract rose 0.8% to £86.50/MWh, 13.7% lower than the same time last year (£100.25/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was up 8.2% to £114.00/MWh, opposing its baseload counterpart.
- December 24 peak power declined 1.5% at £111.75/MWh, and January 25 peak power increased 0.2% to £119.65/MWh.
Annual October contract
- The annual April 25 peak power rose 0.4% to £89.08/MWh.
- This is 11.9% lower than the same time last year (101.1/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts boosted last week, up on average by 0.3%.
- Summer 25 and winter 25 expanded 1.5% and 0.2% respectively, rising to £84.50/MWh and £88.50/MWh.
Seasonal peak power curve
- Most Seasonal peak power contracts boosted last week, up 0.5% on average.
- Summer 25 gas increased 1.2% to £90.50/MWh, while winter 25 peak power dropped 0.4% to £102.00/MWh.
Commodity price movements
Oil and coal
- Last week saw bullish movements for Brent crude oil, up 2.2% to $73.71/bl.
- Bullish sentiment was primarily due to the escalation in the conflict between Russia and Ukraine, generating supply concerns, with these concerns being exacerbated by outages at Norway’s Sverdrup oilfield and the Tengiz oilfield in Kazakhstan.
- However, on-going concerns regarding levels of Chinese oil demand, acted to partially mitigate against further gains.
- Looking ahead into the future, brent crude oil prices will likely continue to observe ongoing volatility, with demand concerns around China’s oil demand, Donald Trump’s victory at the US election, the Middle-East conflict, and escalations in the Russia-Ukraine war expected to have long-term implications on the oil market.
Carbon (UK and EU ETS)
- Last week was another bullish period for the EU ETS, rising 2.7% to €69.22/t following on-going price volatility across Dutch TTF gas, in which it remains highly coupled with.
- The European Commission announced that it would not increase EUA auction volumes in the near term under its REPowerEU programme to account for lower allowance prices, a bullish driver as lower auction volumes lead to higher prices.
- For the UK ETS prices recorded losses week-on-week, falling 0.9% to £37.92/t, amid higher rates of wind generation, reducing reliance on fuelled generation.
- Over the coming weeks, carbon prices across both schemes will continue to be heavily related to the amount of wind generation on their respective grid – especially in GB where wind accounts for a higher proportion of the generation mix.
- Looking further ahead, from the start of 2025, it’s likely the beginning of a new trading year will buoy prices in the short-term, but the effect of this will be affected by weather conditions nearer the time.
Wholesale price snapshot – Friday-on Friday
