Headlines
This week, we observed primarily bullish movements across wholesale gas and power prices, with exceptions coming from shorter-term power contracts due to recent mild weather helping to lower demand, and higher wind generation on the system allowing prices to soften. This resulted in day-ahead baseload power recording a drop of 4.1% to £65.00/MWh, and day-ahead peak power prices slipping 17.7% to £67.50/MWh. However, all tracked gas contracts registered gains, with day-ahead gas rising 8.0% to 71.00p/th, following reduced supply from both the Norwegian and UK Continental Shelf as maintenance limits flows from gas terminals. April 24 gas was up 6.0% at 70.60p/th, and May 24 gas increased 5.2% to 69.30p/th, although present gas storage levels across the continent remain strong, limiting higher gains that could have been registered. All seasonal gas contracts boosted last week too, up by 2.6% on average, with both summer 24 and winter 24 gas increasing 3.8% and 3.3% respectively, lifting to 69.00p/th and 81.50p/th. Likewise, all seasonal power contracts boosted this week, up on average by 1.8%, as summer 24 and winter 24 expanded 1.2% and 1.5% respectively, rising to £63.25/MWh and £75.60/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power fell 4.1% to £65.00/MWh, despite falling wind outturn projections and rising demand forecasts for Monday.
- April 24 power slipped 0.4% at £62.50/MWh and May 24 power decreased 1.2% to £60.75/MWh.
Annual October contract
- Q224 power moved 1.6% higher to £62.00/MWh.
- The annual April 24 contract rose 1.4% to £69.43/MWh, 46.8% lower than the same time last year (£130.50/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 17.7% to £67.50/MWh, following its baseload counterpart lower.
- April 24 peak power declined 0.1% at £62.65/MWh, and May 24 peak power remained level at £59.85/MWh.
Annual October contract
- The annual April 24 peak power rose 0.9% to £76.33/MWh
- However, this is still 44.3% lower than the same time last year (137.00/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts boosted this week, up on average by 1.8%.
- Summer 24 and winter 24 expanded 1.2% and 1.5% respectively, rising to £63.25/MWh and £75.60/MWh.
Seasonal peak power curve
- All seasonal peak power contracts boosted this week, up 0.9% on average.
- Summer 24 and winter 24 peak power increased 1.0% and 0.9% respectively, rising to £65.90/MWh and £86.75/MWh.
Commodity price movements
Oil and coal
- The price of Brent crude rose 3.3% to average $86.15/bl.
- Upward price movements were driven by disruptions to Russian oil refining by strikes and damage from Ukrainian attacks, impacting supply into Chinese and Indian markets.
- Likewise, Brent crude reached $86.85/bl on 19 March, the highest level seen since November 2023 amid greater economic growth across both China and the US, alongside reduced exports from Saudi Arabia and Iraq.
- Moreover, a drop in commercial crude oil stocks from the US for a second consecutive week further strengthened the bullish sentiment seen.
- However, stronger gains were limited by indications that there will be fewer U.S. interest rate cuts from the Federal Reserve, potentially keeping interest rates higher for longer and impacting oil demand across the country.
- Bearish sentiment rose as chances of a ceasefire in Gaza gained traction in talks, potentially easing the impact the conflict may have on shipping routes through the Red Sea in future
Carbon (UK and EU ETS)
- The UK and EU carbon markets recorded bullish pricing movements, with the EU ETS rising 6.5% to average €60.69/t, and the UK ETS rising 1.0% to average £36.62/t
- Across the EU ETS, prices were supported by the March 2024 EUA futures expiry on 18 March. This led to EU ETS prices reaching the highest level seen since the start of February 2024 at €61.85/t on 18 March – however stronger gains were limited by higher wind generation on the system, reducing demand for EUAs.
- Looking at the UK ETS, bullish movements came from gains seen across gas prices following maintenance at Norwegian and UK Continental Shelf gas terminals reducing supply into GB, alongside reductions to LNG volumes.
- Stronger gains were limited as temperatures across Europe and the UK remained above-average, in tandem with stronger wind generation levels.
- However, prices could grow in the short-term as market participants price in the lower auction supply over the next two weeks due to the upcoming Easter holiday.
Wholesale price snapshot – Friday-on Friday
