Generally, this week represented a predominately bearish sentiment for gas and power prices, with some exceptions on day-ahead contracts. In keeping with the largely downward movement of prices, day-ahead gas fell 4.4% to 217.00p/th, following periods of warmer weather stifling heating demand, a trend expected to extend into next week too. Increased LNG deliveries into UK terminals also increased LNG send-out and eased the current tight gas supply picture slightly. Day-ahead power rose to the contrary, up 11.2% to £239.00/MWh, with much lower periods of wind generation observed, set to continue across much of next week. Font-month contracts saw pronounced losses, with February 22 gas down 8.4% at 216.39p/th, and March 22 gas lowering 8.0% to 213.93p/th. Most seasonal gas contracts declined this week, down by 7.9% on average, with both summer 22 and winter 22 gas dropping 15.0% and 14.2% respectively, subsiding to 174.66p/th and 182.61p/th. This bearish trend was shared with seasonal power contracts, down on average by 7.0%, as summer 22 power decreased 11.6% to £164.00/MWh, while winter 22 fell 13.0% to £174.00/MWh.
Day-ahead power rose 11.2% to £239.00/MWh, following periods of low wind outturn in the week.
February 22 power slipped 17.5% at £228.05/MWh and March 22 power decreased 2.8% to £207/MWh.
Q222 power moved 10.9% lower to £168.00/MWh.
The annual April 22 contract lost 12.3% to £169.00/MWh, 236.3% higher than the same time last year (£50.26/MWh).
Forward Curve Comparison
Annual April Contract
Day-ahead peak power was up 12.5% to £270.00/MWh, following baseload power higher.
February 22 peak power declined 40.7% at £255/MWh, and March 22 peak power decreased 11.4% to £195.00/MWh.
The annual April 22 peak power rose 14.4% to £185.00/MWh
This is 225.2% higher than the same time last year (56.88/MWh).
Forward curve comparison
Annual April contract
Seasonal power prices
Seasonal baseload power contracts
Seasonal baseload power curve
Most seasonal power contracts declined this week, down on average by 7.0%.
Summer 22 power decreased 11.6% to £164.00/MWh, while winter 22 fell 13.0% to £174.00/MWh.
The majority of seasonal peak power contracts declined this week, down 1.4% on average.
Summer 22 and winter 22 peak power dropped 14.1% and 14.6% respectively, falling to £170.00/MWh and £200.00/MWh.
Commodity price movements
Oil and Coal
Brent crude prices climbed again this week, up 3.8% to average $83.59/bl.
Prices still remain sensitive to any bearish sentiment in the market surrounding the Omicron coronavirus variant, with cases continuing to rise across many major economies, particularly in Europe.
However, some upward pressure was placed on Brent crude prices this week which ultimately saw prices climb from the week prior.
Tight market supply continues to provide a strong foundation of price support.
Carbon prices saw bearish movements this week. The UK ETS which fell 5.0% to £72.15/t. The EU ETS market mirrored these trends, down 4.3% to €81.58/t.
Milder weather in the UK has subdued gas fired generation significantly, with less demand for EUA’s to cover increased emissions from thermal plant.
Additionally, delays to EUA auctions ended this week, with the reintroduction of EUA’s back into the market, increasing market supply.
Wholesale price snapshot
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