All power and gas contracts fell, reversing the previous week’s gains. Gas contracts were down following the end of unplanned outages, an increase in production from UKCS and a decline in Brent crude oil prices. Day-ahead gas was down 14.0% to 29.6p/th. The contract started the week at a three-month high of 38.3p/th, as the gas system was undersupplied following an unplanned outage at Aasta Hansteen and a rise in gas for power demand. On average seasonal contracts were 2.8% lower week-on-week, following a decline in Brent crude oil prices. Winter 19 gas dropped 2.6%, ending the week at 53.1p/th, this is 9.8% lower than the same time last year (58.8p/th). The fall in gas prices has pushed power prices lower, which found further pressure from higher wind generation towards the end of the week. The day-ahead contract reversed the previous week’s gains, dropping 14.8% to end the week at £39.7/MWh, a two-week low. On average, seasonal baseload power contracts were down 3.3% week-on-week, mirroring their gas counterparts. Winter 19 power dropped 2.9% to £58.0/MWh. Brent crude oil slipped 0.9% to average $65.1/bl. Prices dropped below $61.5/bl on 18 July, a one month low. API 2 coal prices lifted 0.5% to average $68.6/t, with prices reaching $69.8/t on 19 July, the highest since 17 May. EU ETS carbon prices averaged €28.6/t, up 4.4%. Prices hit a fresh 11-year high of €29.5/t on 15 July. However, prices later dropped back below €28.0/bl, with some market participants labelling the retreat in prices as a “short-term correction.”
Baseload electricity
The day-ahead contract reversed the previous week’s gains, dropping 14.8% to £39.7/MWh, a two-week low.
August and September 19 power were down 7.9% and 6.5% to £41.1/MWh and £43.4/MWh respectively.
Annual October 19 power declined by 3.3% week-on-week to £54.3/MWh.
The contract is 5.0% higher than the same time last month (£51.7/MWh), and 4.7% above the same time last year (£51.9/MWh).
Forward curve comparison
Annual October Contract
Peak electricity
Day-ahead peak power fell 16.8% to £42.0/MWh, £2.3/MWh above its baseload counterpart.
Day-ahead peak power is 31.6% lower than the same time last year when it was £61.4/MWh.
August and September 19 peak power decreased 7.4% and 6.3% to £44.1/MWh and £46.4/MWh respectively.
Annual October 19 peak power was down 2.6% to £59.9/MWh, £5.6/MWh above its baseload power counterpart.
The contract is 4.0% above its value this time last month (£57.6/MWh), and 3.2% higher than the same time last year when it was £58.0/MWh.
Forward curve comparison
Annual October contract
Seasonal power prices
Seasonal baseload power contracts
Seasonal baseload power curve
On average, seasonal baseload power contracts were 3.2% lower, mirroring their gas counterparts.
Winter 19 power fell 2.9% to £58.0/MWh.
Summer 20 power was down 3.6% at £50.7/MWh.
Seasonal peak power contracts declined by 2.5% on average.
Winter 19 peak power dropped 2.6% to £64.4/MWh, remaining £6.4/MWh below its baseload counterpart.
Commodity price movements
Oil and Coal
Carbon
Brent crude oil slipped 0.9% to average $65.1/bl.
Prices dropped below $61.5/bl on 18 July, a one month low.
Oil prices have been pressured by expectations of weaker oil demand due to slower global economic growth. This led the IEA to lower its 2019 oil demand growth forecast to 1.1mn bpd, down from forecasts of 1.5mn bpd last year.
API 2 coal prices lifted 0.5% to average $68.6/t, with prices reaching $69.8/t on 19 July, the highest since 17 May. Coal prices were supported by lower nuclear power plant availability across NW Europe, with German coal-fired capacity rising from 13.1GW to 14.4GW, while available nuclear capacity was down from 8.5GW to 7.4GW. This follows warmer temperatures and higher cooling demand.
EU ETS carbon prices averaged €28.6/t, up 4.4%.
Prices hit a fresh 11-year high of €29.5/t on 15 July.
However, prices later dropped back below €28.0/bl, with some market participants labelling the retreat in prices as a “short-term correction” to the recent record highs.
Carbon prices have been supported by lower wind generation and hotter temperatures across NW Europe, with weaker wind leading to an increase in conventional power generation and cooling demand picking up as temperatures have been well above seasonal normal levels. In France, this has coincided with reduced nuclear fleet availability, further exacerbating the pickup in coal generation.
Wholesale price snaphot
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