3 May 2019

Headlines

The majority of wholesale power and gas contracts were lower week-on-week, as a comfortable gas supply outlook and a fall in Brent crude oil prices pushed contracts lower. Forecasts of temperatures well below seasonal normal levels early in May supported day-ahead gas prices, however, this did not feed into day-ahead power prices which followed EU ETS carbon prices down. Day-ahead power was down 2.6% to end the week at £42.9/MWh, although the contract rose as high as £45.3/MWh in the middle of the week as wind output was low. Seasonal power contracts were 5.7% lower on average. Winter 19 and 20 contracts fell 5.6% and 5.7% to £56.7/MWh and £55.6/MWh respectively. Nearly all gas contracts fell last week, with only day-ahead and July 19 gas rising. Week-on-week, day-ahead gas increased 3.4% to 34.9p/th. Despite the gas system being oversupplied, forecasts of cooler temperatures early in May supported prices throughout the week. All seasonal contracts fell week-on-week, down 6.8% on average, following a fall in oil prices. Brent crude oil prices fell for the first time in eight weeks, dropping 3.7% to average $71.5/bl. Oil prices fell following news that total US crude production ended April at a record high of 12.3mn bpd, causing prices to fall below $70/bl on 2 May, a one-month low. API 2 coal prices fell 3.6% to average $70.1/t, dropping as low as $69.7/t on 2 May, also a one-month low. EU ETS carbon prices reversed recent gains, falling 5.3% to average €25.7/t last week as the compliance period on 30 April ended.

Baseload electricity
  • Day-ahead power was down 2.6% to end the week at £42.9/MWh, despite forecasts of weaker wind output.
  • June and July 19 power were down 2.9% and 1.1% to £42.8/MWh and £43.2/MWh respectively.
  • Annual October 19 power decreased 6.1% week-on-week to £52.2/MWh.
  • The contract is 3.0% lower than the same time last month (£53.8/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 3 May 2019

Annual April Contract

Baseload electricity Annual October contract 3 May 2019

Peak electricity
  • Day-ahead peak power fell 7.5% to £43.0/MWh, £0.1/MWh above its baseload counterpart.
  • Day-ahead peak power is 18.9% lower than the same time last year when it was £53.0/MWh.
  • June and July 19 peak power were down 3.7% and 1.0% at £46.8/MWh and £47.4/MWh, respectively.
  • Annual October 19 peak power dropped 5.5% to end the week at £57.9/MWh, remaining £5.7/MWh above its baseload power counterpart.
  • The contract is 2.3% below its value this time last month (£53.2/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 3 May 2019

Annual April contract

Peak electricity Annual October contract 3 May 2019

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 3 May 2019

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 3 May 2019

  • Seasonal power contracts were 5.7% lower on average.
  • Winter 19 and 20 contracts fell 5.6% and 5.7% to £56.7/MWh and £55.6/MWh respectively.
  • Winter 19 power is up 9.8% from the same time last year when it was £51.6/MWh.
  • Seasonal peak power contracts fell 5.2% on average, with winter 19 peak power down 5.0% at £63.8/MWh.
  • Summer and winter 20 peak contracts were 6.2% and 4.5% lower at £52.0/MWh and £63.2/MWh.
Commodity price movements

Oil and Coal 

Commodity price movements Oil and coal 3 May 2019

Carbon

Commodity price movements Carbon 3 May 2019

    • Brent crude oil prices fell for the first time in eight weeks, dropping 3.7% to average $71.5/bl.
    • Total US crude production ended April at a record high of 12.3mn bpd, causing prices to fall below $70/bl on 2 May, a one-month low.
    • OPEC oil production in April was expected at a four-year low of 30.2mn bpd, down 90,000 bpd from March.
    • API 2 coal prices fell 3.6% to average $70.1/t, dropping as low as $69.7/t on 2 May, also a one-month low.
    • Coal prices have continued to be pressured by weak demand and high coal stocks at key ARA terminals, which ended April at 6.5mn tonnes.
    • Coal imports into ARA terminals are estimated to have been 50% lower in April than in March, and 20% lower than the same time last year.
  • EU ETS carbon prices reversed recent gains, falling 5.3% to average €25.7/t last week.
  • Carbon prices dropped below €25/t at the end of the week, as last-minute buying for the 30 April compliance deadline ends, and forecasts of higher wind generation in Germany will push coal-fired power plant out of the generation mix and ease demand for EUAs.
  • Reuters released a revised EU ETS carbon price forecast last week, projecting EUAs to remain between €23.5/t-€28.0/t in the near-term. The new Q219 forecast has been raised €2/t to €25/t, whilst the forecasts for both the H219 and 2019 averages are unchanged at €23/t.
Wholesale price snapshot

Wholesale price snapshot 3 May 2019

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