The majority of gas and power contracts retreated week-on-week, with the predominant bearish movements seen across near-term contracts, but with gains seen further out on the forward curve – a potential consequence of risk premiums being baked into longer-dated contracts as global wholesale energy supply disruption concerns continue in the wake of the war in Ukraine. Furthermore, day-ahead gas fell 19.8% to 239.00p/th, indicative of the on-going volatility across the wholesale gas landscape, with specific bearish drivers this week including periods of system oversupply. Day-ahead power declined 18.4% to £200.00/MWh, mirroring bearish trends set from its gas counterpart contract. These bearish fundamentals filtered into front-month contracts too, with May 22 gas down 18.8% at 242.11p/th, and June 22 gas decreased 16.9% to 250.80p/th. However, most seasonal gas contracts boosted this week, up by 31.5% on average, while winter 22 gas dropped 14.4% to 254.65p/th, while summer 23 gas increased 79.5% to 268.10p/th. In a similar vain, seasonal power contracts saw gains this week, up on average by 7.5%, as winter 22 power decreased 8.5% to £238.00/MWh, while summer 23 expanded 8.9% to £152.50/MWh.
Day-ahead power fell 18.4% to £200.00/MWh, following losses observed in near-term gas contracts and periods of higher wind outturn in the week.
May 22 power slipped 14.5% at £213.00/MWh and June 22 power decreased 12.3% to £222.00/MWh.
Q3-22 power moved 8.5% lower to £238.00/MWh.
The annual October 22 contract lost 2.4% to £195.25/MWh, 267.5% higher than the same time last year (£53.13/MWh).
Forward Curve Comparison
Annual April Contract
Day-ahead peak power was down 15.7% to £215.00/MWh, following baseload power lower.
May 22 peak power declined 16.0% at £222.50/MWh, and June 22 peak power decreased 13.9% to £230.80/MWh.
The annual October 22 peak power rose 2.3% to £224.35/MWh
This is 270.3% higher than the same time last year (60.58/MWh).
Forward curve comparison
Annual April contract
Seasonal power prices
Seasonal baseload power contracts
Seasonal baseload power curve
The majority of seasonal power contracts boosted this week, up on average by 7.5%.
Summer 23 expanded 8.9% to £152.50/MWh and winter 23 rose 7.0% to 153.00p/th.
Most seasonal peak power contracts boosted this week, up 12.7% on average.
Summer 23 peak power increased 19.2% to £169.30/MWh whilst the winter 23 contract lifted 11.9% to 166.71p/th.
Commodity price movements
Oil and Coal
Brent crude prices fell week-on-week, a second consecutive week of decline, subsequently falling 5.6% to average $104.82/bl.
There were numerous fundamentals influencing the trajectory of Brent crude prices this week, but with the most prevalent drivers having a suppressive impact on prices overall.
The US and other IEA member nations orchestrated the release of strategic crude reserves to help soften some of the on-going market tightness, easing supply fear sentiment – expected to equate to approximately 120mn barrels over the next six months.
Carbon markets experienced collective decline from the previous week. The UK ETS fell 2.3% to average £74.56/t, with the EU ETS sharing a similar week-on-week decline, down 4.9% to average £75.35/t.
For the UK ETS more specifically, higher wind outturn and cooler weather across the last seven days prompted higher demand via gas-fired assets, increasing the demand for EUA’s in turn. Similarly, the continuation of elevated gas prices, has increased the levels of gas-to-coal switching, bumping up demand for EUA’s too.
Wholesale price snapshot
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