Headlines
It has been a relatively mixed week in terms of pricing fundamentals for both gas and power markets. Most seasonal contracts saw price rises, while short-term and day-ahead contracts declined. Day-ahead gas fell 9.7% to 53.25p/th, with a period of warmer weather at the start of the week coupled with system oversupply. Similarly, day-ahead power lost 13.3% to £62.00/MWh, following strong wind generation at the week’s start. March 21 gas was up 3.5% at 49.20p/th, and April 21 gas decreased 1.9% to 45.81p/th. Most seasonal gas contracts increased this week, up by 1.1% on average. Summer 21 gas dropped 0.9% to 43.17p/th, while winter 21 gas increased 0.9% to 52.13p/th. All seasonal power contracts climbed this week, up on average by 2.7%. Summer 21 and winter 21 power lifted 1.9% and 3.7% respectively, rising to £53.49/MWh and £60.81/MWh. Brent crude oil rose again this week, up 3.3% to $57.76/bl. The market responded well to major crude producers demonstrating they were keeping in line with their output commitments, as a mechanism to combat market oversupply. Similarly, oil prices continue to benefit from extended supply cut pledges from Saudi Arabia for February and March, to combat fears of a lack of demand and market oversupply. EU ETS carbon prices rose 5.9% to average €35.46/t. Impending cold weather forecast across much of Europe and the UK will likely offer some support to prices.
Baseload electricity | | |
- Day-ahead power fell 13.3% to £62.00/MWh, following increased wind generation, particularly at the week’s start.
- March 21 power slipped 4.1% to £59.00/MWh and April 21 power increased 8.4% to £55.75/MWh.
| | - Q221 power moved 5.6% higher to £56.35/MWh.
- The annual April 21 contract rose 2.8% to £57.15/MWh, 36.3% higher than the same time last year (£41.93/MWh).
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Forward curve comparison | | Annual April Contract |
Peak electricity | | |
- Day-ahead peak power was down 21.8% to £68.00/MWh, following the baseload contract lower.
- March 21 peak power declined 8.3% to £62.79/MWh, and April 21 peak power decreased 0.7% to £59.93/MWh.
| | - The annual April 21 peak power contract lost 0.2% to £62.14/MWh.
- This is 30.9% lower than the same time last year (47.46/MWh).
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Forward curve comparison | | Annual April contract |
Seasonal power prices | | |
Seasonal baseload power contracts | | Seasonal baseload power curve |
- All seasonal power contracts rose this week, up on average by 2.7%.
- Summer 21 and winter 21 power expanded 1.9% and 3.7% respectively, rising to £53.49/MWh and £60.81/MWh.
| | - Most seasonal peak power contracts climbed this week, up 1.4% on average.
- The summer 21 contract dropped 0.4% to £56.29/MWh, while winter 21 peak power increased 0.8% to £67.99/MWh.
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Commodity price movements | | |
Oil and Coal | | Carbon
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- Brent crude oil rose again this week, up 3.3% to $57.76/bl.
- The resurgence in COVID-19 global case numbers continues to loom over the majority of commodity markets, fuelling market uncertainty and demand concerns. However, Brent crude continues to remain resilient.
- The market responded well to major crude producers demonstrating they were keeping in line with their output commitments, as a mechanism to combat market oversupply.
- API 2 coal fell 2.0% from the previous week to average $66.34/t.
| | - EU ETS carbon prices grew this week, rising 5.9% to average €35.46/t.
- Like other commodity markets, high case numbers of COVID-19 across Europe continued to act bearishly on the carbon price. The introduction of increased EUA auction volumes this week pressurised the market, with the market soaking up over 15.1mn EUA’s.
- Impending cold weather forecast across much of Europe and the UK will likely offer some support to prices, as well as a consequential rise in fossil.
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Wholesale price snapshot |