29 April 2022

Headlines

This week, the majority of gas and power contracts reported losses, despite news that Bulgaria and Poland saw gas supplies from Russia cut off on Wednesday, prompting notable bullish price movement mid-week. Day ahead gas dropped 20.9% to 125.00p/th, weighed on by system oversupply following a reduction in exports to Europe, amid maintenance at the IUK interconnector. Following wider movements in global commodity markets, further along the forward curve June 22 gas traded 26.2% lower at 155.05p/th, while summer 23 gas lost 13.4% to 170.50p/th. All power contracts went down last week with the exception of day-ahead power, which was unchanged at £160.00/MWh. The day-ahead power contract remained varied during the week amid forecasts of reduced wind output, but ultimately followed movements in its gas counterpart, peaking at £190.00/MWh on Wednesday. Q322 power slipped 10.6% to £195.00/MWh, summer 23 power reduced 7.9% to £163.00/MWh, and winter 23 power went down 6.6% to £170.00/MWh. EU ETS carbon dropped 2.6% to average €82.65/t, while UK ETS carbon went up 4.0% to average £81.24/t, finding support from lower renewables output this week.

Baseload electricity
  • Day-ahead power was unchanged at £160.00/MWh, with prices varying during the week amid forecasts of reduced wind output.
  • May 22 power fell 16.0% to £152.00/MWh and June 22 followed suit, down 15.8% to £168.50/MWh.
  • Q322 power lost 10.6% lower to £195.00/MWh.
  • The annual October 22 contract declined 3.5% to £196.00/MWh.
Forward Curve Comparison

Annual April Contract

Peak electricity
  • Day-ahead peak power saw gains across the week, rising 4.2% to £172.00/MWh.
  • May 22 peak power fell 12.9% to £172.30/MWh, and June 22 peak power eased 14.8% to £184.70/MWh.
  • The annual October 22 peak power lifted 0.9% to £236.63/MWh.
  • This is 229.7% higher than the same time last year (£60.50/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

  • All seasonal power contracts saw losses this week, easing on average by 4.3%.
  • Winter 22 dropped 0.1% to £229.00/MWh and summer 23 slipped 7.9% to £163.00/MWh.
  • Most seasonal peak power contracts also moved lower this week, down 1.4% on average.
  • Winter 22 peak power increased 2.1% to £286.00/MWh, whilst the summer 23 contract fell 5.1% to £187.25/MWh.
Commodity price movements

Oil and Coal

Carbon
  • Furthering losses reported last week, Brent crude oil eased 3.5% to average $104.81/bl
  • Oil prices were weighed on by concerns over a weaker demand outlook, amid prolonged lockdown measures in China, and potential increases in US interest rates.
  • Bearish sentiment also stemmed from the expectation that OPEC+ members will agree to increase output for June 2022, with members due to meet on 5 May
  • EU ETS carbon dropped 2.6% to average €82.65/t, while UK ETS carbon went up 4.0% to average £81.24/t, finding support from lower renewables output this week.
  • Carbon prices followed many wider energy markets lower, as traders seek clarity on how to pay for Russian gas supplies, without breaching EU santions.
  • Towards the end of the week EU ETS prices lost any gains due to low trading volumes as the market moved into a long bank holiday weekend.
Wholesale price snapshot 

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