Headlines
We observed consistent bearish gas price movements across all tracked contracts this week, a likely consequence of the continued strong EU gas storage levels, at approximately 82% full at the time of writing. As a result, day-ahead gas fell 8.6% to 80.00p/th, despite below-average temperatures increasing domestic heating demand. Similarly, February 24 gas was down 8.6% at 78.30p/th, and March 24 gas decreased 8.6% to 77.50p/th. All seasonal gas contracts declined this week, down by 4.1% on average, as both summer 24 and winter 24 gas dropped 7.4% and 4.8% respectively, subsiding to 77.50p/th and 93.75p/th. Experiencing a trend similar to its gas counterpart, day-ahead power fell 11.1% to £80.00/MWh, finding bearish direction from increased wind generation levels, reducing gas-for-power demand and easing system margins in tandem. Moreover, all seasonal power contracts declined this week, down on average by 7.9%, as summer 24 power decreased 10.3% to £70.40/MWh, and winter 24 fell 6.9% to £88.00/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 11.1% to £80.00/MWh, with higher forecast wind output for Monday, easing system margins.
- February 24 power slipped 12.5% at £77.00/MWh and March 24 power decreased 11.7% to £72.00/MWh.
Annual October contract
- Q224 power moved 11.1% lower to £69.75/MWh.
- The annual April 24 contract lost 8.4% to £79.20/MWh, but 54.1% lower than the same time last year (£172.50/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 6.5% to £114.75/MWh, following its baseload counterpart lower.
- February 24 peak power declined 13.0% at £92.44/MWh, and March 24 peak power decreased 11.1% to £79.40/MWh.
Annual October contract
- The annual April 24 peak power fell 8.0% to £88.50/MWh
- This is 49.7% lower than the same time last year (176.00/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined this week, down on average by 7.9%.
- summer 24 power decreased 10.3% to £70.40/MWh, while winter 24 fell 6.9% to £88.00/MWh.
Seasonal peak power curve
- All Seasonal peak power contracts declined this week, down 8.0% on average.
- Summer 24 and winter 24 peak power dropped 8.2% and 7.9% respectively, falling to £75.75/MWh and £101.25/MWh
Commodity price movements
Oil and coal
- Brent crude registered a slight upward movement across the recorded week, opposing recent bearish trends seen across the commodity – rising 0.6% week-on-week to average $78.05/bl.
- We observed the weight of some stronger bullish factors transpire this week, with prices finding support from conflict across the Middle East following the seizure of an oil tanker by Iran and strikes from the UK and US.
- Furthermore, Libya’s National Oil Corporation (NOC) declared a force majeure at the Sharara oilfield following protests, disrupting flows from the country.
- However, stronger gains across the commodity were limited by record US oil output acting to offset reduced supply from the Middle East and the further OPEC+ group.
Carbon (UK and EU ETS)
- During the reporting period, price decreases were registered across both ETS markets, with the EU ETS recording losses ahead of the restart of auctions on 15 January.
- As a result, EU ETS carbon dropped 7.9% to average €70.79/t and UK ETS carbon fell 11.5% to average £39.07/t.
- These losses seen across both schemes were compounded by higher week-on-week wind generation, acting to loosen system margins and decrease reliance on more expensive forms of power generation.
- The EU ETS carbon price is anticipated to be supported by the reduced EU ETS Cap in 2024, and the introduction of the maritime sector.
- Carbon prices will continue to be driven by wind generation and temperatures across the UK and Europe.
Wholesale price snapshot – Friday-on Friday
