Headlines
Nearly all wholesale power and gas contracts moved lower this week. Day-ahead power dropped to £35.7/MWh, the lowest since 31 May and was pressured by forecasts of higher wind over the weekend and early next week, at 10.0GW on Sunday and 6.3GW on Monday. Both September and October 19 power moved to three-week lows at £42.5/MWh and £44.5/MWh respectively, while winter 19 power declined 3.2% to £53.9/MWh, the lowest since 2 April. Gas contracts up to and including summer 20 were down with a pickup in UKCS production offsetting ongoing maintenance in Norway. Day-ahead gas dropped 2.7% to 27.3p/th, amid an oversupplied gas system. This was despite the extension of maintenance works at Norway’s Nyhamna gas plant until the 30 September, reducing flows by 7.3mcm/d. September and October 19 gas contracts both fell, down 5.2% and 6.4% to 31.7p/th and 35.5p/th respectively. The month-ahead gas contract has been pressured by forecasts of above seasonal normal level temperatures in September. Both API 2 coal and EU ETS carbon fell to six-week lows, down 1.7% to $64.6/t and 5.9% to €26.7/t, respectively. However, Brent crude oil was unchanged at $59.0/bl, despite ongoing concerns of an economic slowdown and an unexpected rise in US crude stocks last week.
Baseload electricity | | |
- Day-ahead power was down 13.1% to £35.7/MWh, the lowest since 31 May, as higher wind generation is forecast over the weekend and early next week.
- September and October 19 power contracts were 5.1% and 5.6% lower at £42.5/MWh and £44.5/MWh respectively, both three week-lows.
| | - Annual October 19 power dropped 2.5% week-on-week to £51.4/MWh.
- The contract is 5.4% below the same time last month (£54.3/MWh), and 6.4% lower than the same time last year (£54.9/MWh).
|
Forward curve comparison 
| | Annual October Contract 
|
| Peak electricity | | |
- Day-ahead peak power was down 11.7% to £38.9/MWh, the lowest since 1 July 2019 and £3.2/MWh above its baseload counterpart.
- September and October 19 peak power decreased by 4.7% and 4.9% to £45.6/MWh and £49.4/MWh, respectively.
| | - Annual October 19 peak power was 2.4% lower at £56.8/MWh, £5.4.MWh above its baseload power counterpart.
- The contract is 5.2% below its value this time last month (£59.9/MWh), and 7.1% below the same time last year when it was £61.1/MWh.
|
Forward curve comparison 
| | Annual October contract 
|
| Seasonal power prices | | |
Seasonal baseload power contracts 
| | Seasonal baseload power curve 
|
- Seasonal baseload power contracts fell1.9% on average. Winter 19 power declined 3.2% to £53.9/MWh, the lowest since 2 April and 9.9% lower than the same time last year (£59.8/MWh).
| | - All seasonal peak power contracts were down, falling 2.2% on average.
- Winter 19 peak power decreased 3.2% to £60.3/MWh, a six-week low.
|
| Commodity price movements | | |
Oil and Coal 
| | Carbon 
|
- Brent crude oil was unchanged this week averaging $59.0/bl.
- Oil prices were pressured by an unexpected rise in US crude stocks last week – up 1.6mn barrels to 440.5mn barrels. However, the ongoing decline in US production and a fall in active oil rigs, was reflected in a revision to the EIA’s projections for US crude production this year, down to 12.27mn bpd.
- API 2 coal prices fell further, down 1.7% to average $64.6/t.
- Coal prices dropped to a six-week low of $64.5/t on 15 August, as demand remained relatively weak amid a rise in wind generation.
| | - EU ETS carbon prices averaged €26.8/t, down 5.9% from the previous week, the largest weekly decline since February.
- Carbon prices have been weighed on by growing concerns of a no-deal Brexit.
- This, combined with cooler temperatures and higher wind generation in Europe, caused EU ETS carbon to drop as low as €25.9/t, the lowest since 5 July 2019.
- EU ETS carbon prices have historically risen in August, as auction volumes are halved due to lower trading activity during summer holidays. Despite this, forecasts of cooler temperatures next week will continue to pressure prices.
|
Wholesale price snaphot
|
