Energy Wholesale Market Review – 08 March 2024


Predominantly bullish gas price movements arose this week due to maintenance at gas terminals across the Norwegian Continental Shelf limiting flows to GB. Likewise, below-average temperatures acted to bolster domestic heating demand, and increase the requirement for gas-fired generation. As a result, day-ahead gas rose 6.0% to 68.50p/th. Similarly, day-ahead power rose 1.8% to £69.25/MWh, with decreased wind generation projections further increasing the requirement for gas-fired assets to meet demand. Moreover, maintenance at GB nuclear stations acts to limit its contribution to the generation mix. Similarly, April 24 gas was up 5.4% at 66.20p/th, and May 24 gas increased 4.8% to 65.50p/th. Most seasonal gas contracts increased this week, however a 12.6% drop to the summer 26 gas contract price led to an overall decrease of 0.4% across seasonal gas contracts. All seasonal power contracts rose, however, up on average by 3.6%, as summer 24 power increased 4.2% to £62.00/MWh, and winter 24 grew 3.8% to £74.00/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 1.8% to £69.25/MWh, gaining support from reduced nuclear capacity across the UK as the Heysham 1 and Hartlepool nuclear reactors remain offline, in tandem with reduced wind generation forecasts for Monday.
  • Likewise, April 24 power climbed 4.2% at £61.50/MWh and May 24 power increased 3.4% to £60.00/MWh.

Annual October contract

  • Q224 power moved 4.7% higher to £61.00/MWh.
  • The annual April 24 contract rose 4.0% to £68.00/MWh, 51.3% lower than the same time last year (£139.50/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 0.3% to £81.75/MWh, opposing the trend registered across its baseload counterpart – albeit marginally.
  • Likewise, April 24 peak power declined 1.2% at £62.75/MWh, whereas May 24 peak power increased 2.4% to £59.8/MWh.

Annual October contract

  • The annual April 24 peak power rose 4.7% to £77.13/MWh
  • However, this is 45.5% lower than the same time last year (141.40/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts boosted this week, up on average by 3.6%.
  • Summer 24 and winter 24 expanded 4.2% and 3.8% respectively, rising to £62.00/MWh and £74.00/MWh.

Seasonal peak power curve

  • All Seasonal peak power contracts boosted this week, up 4.6% on average.
  • Summer 24 and winter 24 peak power increased 4.3% and 5.0% respectively, rising to £66.00/MWh and £88.25/MWh.

Commodity price movements

Oil and coal

  • Throughout the week, Brent crude averaged $82.82/bl – largely unchanged from the week before, seeing mixed movement throughout the week.
  • Gains were supported amid U.S crude stocks building at a lower-than-expected rate, in tandem with expectations that U.S. interest rate cuts will happen this year. Likewise, greater Chinese trading data and a weaker US dollar aided in providing further bullish sentiment for oil prices to follow.
  • The OPEC+ group announced that they would be extending the oil output cuts of 2.2million barrels per day into quarter 2 of 2024, with Russia committing to gradually increase its production cuts from 350,000 bl/day in April to 471,000bl/day in June.
  • Stronger gains were limited by market reports of a relatively stable market in the whole, despite extended supply cuts from OPEC+, as increased supply from the Americas offsets the market impact.

Carbon (UK and EU ETS)

  • Matching the trend observed in the week previous, both carbon markets registered gains in their average prices last week, rising 7.0% on average in the EU ETS and by 0.4% in the UK ETS.
  • As wind generation levels dropped across the reporting period, gas generation requirements were bolstered to ensure demand was met during periods of below-average temperatures.
  • For the EU scheme in particular, which recorded much higher gains when compared to its UK counterpart, prices were driven up by subsequent rises across gas contracts and the upcoming expiry of the March options contract.
  • As temperatures increase into the summer months, demand will drop and thus a reduction in carbon prices will occur.
  • This, coupled with improvements to European LNG regasification capacity will likely act to push prices down into the future.

Wholesale price snapshot – Friday-on Friday

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