Headlines
It was a predominantly bullish week for most gas and power contracts last week, opposing the movements which are typically seen during the summer months. Day-ahead gas rose 2.5% to 75.23p/th, finding bullish influence on 26 July from projections of reduced wind generation and the rerouting of flows from Vesterled to the continent. Moreover, reduced UKCS flows due to maintenance at Bacton Perenco impacted supply levels into GB, further supporting gains seen. Day-ahead power increased 0.5% to £73.90/MWh, taking direction from bullish near-term gas markets and decreased nuclear capacity across GB – reducing the total generation capacity available on the system. August 24 gas was up 3.1% at 76.00p/th, and September 24 gas increased 2.0% to 80.00p/th. All seasonal gas contracts rose last week, up by 2.0% on average, with winter 24 and summer 25 gas up 1.4% and 3.0%, to 95.65p/th and 90.45p/th respectively. All seasonal baseload power contracts also traded higher, up on average by 1.1%. Winter 24 and summer 25 power went up 1.0% and 2.1% respectively, rising to £84.50/MWh and £74.00/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power rose 0.5% to £73.90/MWh, following periods of lower levels of wind generation on the system acting to outweigh reduced demand due to the summer period.
- August 24 power climbed 2.0% to £68.00/MWh and September 24 power increased 0.5% to £71.90/MWh.
Annual October contract
- Q424 power moved 1.6% higher to £81.75/MWh.
- The annual October 24 contract rose 1.5% to £79.25/MWh, 29.2% lower than the same time last year (£112.00/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 0.3% to £75.75/MWh, opposing the movement seen across its baseload counterpart.
- August 24 peak power declined 0.2% at £72.50/MWh, whereas September 24 peak power increased 7.5% to £76.90/MWh.
Annual October contract
- Annual October 24 peak power rose 6.4% to £92.53/MWh.
- This is 41.5% lower than the same time last year (158.30/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts rose across the reporting period, up on average by 1.1%.Winter 24 and summer 25 expanded 1.0% and 2.1% respectively, rising to £84.50/MWh and £74.00/MWh.
Seasonal peak power curve
- All seasonal peak power contracts saw gains last week, up 6.7% on average.
- Winter 24 and summer 25 peak power increased 0.8% and 2.1% respectively, rising to £99.10/MWh and £79.90/MWh. Winter 25 rose 17.0% to £98.60/MWh
Commodity price movements
Oil and coal
- Brent crude oil saw a continued decrease across the reporting period down 3.7% to average $81.31/bl, finding influence from sustained reduced demand across China, with current market data outlining that China’s total fuel oil imports fell 11% across the first half of 2024, due to weak refining margins and limited fuel demand.
- Moreover, ceasefire talks between Israel and Hamas are currently ongoing, potentially removing this risk factor from oil prices if a ceasefire is called, providing a bearish sentiment across the market.
- However stronger losses were limited as threats to production from Canada acts to limit total global supply. These reduction threats are the result of wildfires across western Canada.
- Similarly, price drops were further limited by a large US crude stock draw, and continued expectations of a cut to US interest rates in September following the release of strong economic data
Carbon (UK and EU ETS)
- Opposing movements were registered across the carbon markets throughout the reporting period, with UK ETS carbon experiencing losses down 2.5% to average £39.85/t, and the EU ETS experiencing gains, up 0.2% to €66.84/t.
- EU ETS carbon prices found support from increased compliance buying, and the upcoming end of the August-24 contract period, in tandem with the absence of the Polish fortnightly auction.
- However, stronger gains were limited by higher coal prices across the reporting period, in turn limiting EUA demand as less carbon intensive forms of power generation were used.
- UK ETS carbon remains influenced by the summer period, leading to lower demand levels and in turn limiting the amount of power generation required on the system.
- Increased temperature forecasts in tandem with reduced wind generation forecasts will act to increase prices across the EU ETS in the week ahead.
Wholesale price snapshot – Friday-on Friday
