06 May 2022

Headlines

This week saw mixed price movements; near-term gas and power contracts recorded strong losses, whilst longer dated seasonal contracts increased. Day-ahead gas fell 48.0% to 65.00p/th, following a prominent decline in price observed on Friday 6 May. Prices were driven by strong system oversupply aided by higher Norwegian flows alongside reduced LDZ demand, amid forecasts of seasonally-high temperatures across the UK. Following the strong drop on the gas day-ahead contract, the day-ahead power contract followed, falling 40.6% to £95.00/MWh. The aforementioned near-term bearish drivers fed through to the June 22 gas contract, which was down 4.8% at 147.63p/th, but the July 22 gas increased 5.5% to 184.62p/th. Longer dated seasonal contracts enjoyed stronger price growth, up by 14.4% on average, with winter 22 and summer 23 gas increasing 6.0% and 9.6% respectively, lifting to 246.00p/th and 186.85p/th, remaining volatile amid the ongoing future gas supply concerns. Following their gas counterparts, all seasonal power contracts boosted this week, up on average by 6.6%, as winter 22 and summer 23 grew 5.7% and 7.4% respectively, rising to £242.00/MWh and £175.00/MWh.

Baseload electricity
  • Day-ahead power fell 40.6% to £95.00/MWh, following strong bearish movements set from its gas countpart contract.
  • June 22 power slipped 0.9% to £167.00/MWh while July 22 power increased 8.2% to £197.00/MWh.
  • Q322 power moved 10.3% higher to £215.00/MWh.
  • The annual October 22 contract lost 3.4% to £189.25/MWh, 214.0% higher than the same time last year (£60.27/MWh).
Forward Curve Comparison

Annual April Contract

Peak electricity
  • Day-ahead peak power was down 36.0% to £110.00/MWh, following baseload power lower.
  • June 22 peak power gained 5.4% at £194.65/MWh, and July 22 peak power increased 12.0% to £219.80/MWh.
  • The annual October 22 peak power rose 5.0% to £248.50/MWh
  • This is 310.7% higher than the same time last year (60.5/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

  • All seasonal power contracts boosted this week, up on average by 6.6%.
  • Winter 22 and summer 23 lifted 5.7% and 7.4% respectively, rising to £242.00/MWh and £175.00/MWh.
  • All seasonal peak power contracts boosted this week, up 5.5% on average.
  • Winter 22 and summer 23 peak power increased 4.6% and 5.6% respectively, rising to £299.20/MWh and £197.80/MWh.
Commodity price movements

Oil and Coal

Carbon
  • Brent crude prices rose 3.4% this week to average $109.59/bl.
  • Brent crude prices saw price growth across this week, reversing recent trends, with the most prominent period of growth seen in the latter stages of the week.
  • Prices were buoyed by news that proposals have been put forward by the EU to implement a phased oil embargo on Russia, feeding future supply concerns in the market, in what is already a tight global landscape for crude supplies.
  • However, price rises this week were capped by ongoing lockdown measured implemented in China, weighing on short-term demand growth outlook
  • API 2 coal rose 4.8% to average $235.00/t.
  • Carbon markets experienced shared upward price growth this week, with EU ETS carbon up 7.3% to average €88.67/t, and UK ETS carbon rising 2.2% to average £83.01/t.
  • EU carbon prices were driven lower by weakening global markets and light trading volumes towards the end of the week, a trend consistent over the last fortnight.
  • In addition, general uncertainty within the market, fuelled by the conflict between Russia and Ukraine, continues to prompt some financial traders to sell off their volumes
Wholesale price snapshot 

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