Headlines
It was a bearish week for gas and power contracts this week, opposing the price gains observed in recent months. Day-ahead gas fell 6.8% to 87.70p/th, following periods of above-average temperature during the week. However, losses were limited by extended maintenance works across the Norwegian Continental Shelf, limiting flows into GB from Norway. Likewise, day-ahead power dropped 8.7% to £81.25/MWh, taking direction from losses made in near-term gas markets and increased wind output during the latter half of the week – reducing gas-for-power requirements. October 24 gas was down 7.8% at 88.25p/th, and November 24 gas decreased 7.3% to 96.60p/th. Moreover, all seasonal gas contracts fell this week too, down by 5.8% on average, with winter 24 and summer 25 gas dropping 6.9% and 6.0% respectively, subsiding to 98.58p/th and 93.25p/th. All seasonal power contracts traded lower this week, down on average by 5.9%. Winter 24 and summer 25 power went down 7.0% and 6.4% respectively, falling to £86.45/MWh and £76.30/MWh. Brent crude oil fell to the lowest level seen since December 2021 on 6 September, following demand concerns from the US and China amid the release of data outlining that Chinese manufacturing activity reached a six-month low. Subsequently, prices were 7.2% lower at $73.83/bl.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 8.7% to £81.25/MWh, despite reaching the highest level seen since December 2023 at £92.94/MWh on 2 September. Overall losses were influenced by periods of increased wind generation on the system in the latter half of the week, and similar losses across its gas counterpart.
- October 24 power slipped 8.9% at £74.40/MWh and November 24 power decreased 6.6% to £87.40/MWh.
Annual October contract
- Q424 power moved 7.9% lower to £82.45/MWh.
- The annual October 24 contract lost 6.7% to £81.38/MWh, 27.2% lower than the same time last year (£111.75/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 23.1% to £69.40/MWh, following its baseload counterpart lower.
- October 24 peak power declined 8.0% at £82.55/MWh, and November 24 peak power decreased 6.1% to £103.8/MWh.
Annual October contract
- The annual October 24 peak power fell 5.7% to £94.72/MWh.
- This is 38.7% lower than the same time last year (154.50/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts fell last week, down on average by 5.9%.
- Winter 24 power decreased 7.0% to £86.45/MWh, while summer 25 fell 6.4% to £76.30/MWh.
Seasonal peak power curve
- All Seasonal peak power contracts declined last week, down 5.7% on average.
- Winter 24 and summer 25 peak power dropped 5.4% and 6.1% respectively, falling to £101.50/MWh and £82.15/MWh.
Commodity price movements
Oil and coal
- Brent crude oil saw bearish movements across the reporting period, down 7.2% to average $73.83/bl, falling to the lowest price observed since December 2021 at $71.65/bl on 6 September, reflecting persistent concerns about weakening demand across the US and China.
- A survey released by China’s National Bureau of Statistics found that manufacturing activity reached a six-month low, reigniting concerns about demand growth for brent crude oil.
- Price losses were limited by OPEC+ announcing that it has delayed its decision to boost output by 180,000 barrels per day in October, due to a weak economic outlook as well as oversupply from alliance members and those outside the group.
- JP Morgan anticipates OPEC+ to maintain its current production for at least another year, resulting in an average price of $75 for Brent crude oil in 2025, with prices falling into the low $60s by the end of 2025 due to low demand.
Carbon (UK and EU ETS)
- Opposing movements were registered across the carbon markets, with the UK ETS experiencing marginal gains, up 0.02% week-on-week to average £42.03/t, and the EU ETS falling 4.6% to average €67.66/t, and reaching the lowest level seen since July 2024 at €66.19/t on 5 September.
- UK ETS carbon prices remained relatively level across the reporting period, as 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.
Wholesale price snapshot – Friday-on Friday
