Energy Wholesale Market Review – 26 January 2024


It was a predominantly bearish week for gas and power contracts this week, continuing the trend of decreasing wholesale prices observed across much of 2023 and 2024 to date. Day-ahead gas fell 5.9% to 65.90p/th, following periods of above-average temperatures during the week and further limited by reduced maintenance works across the Norwegian Continental Shelf, bolstering flows into GB from Norway. Opposing this, day-ahead power rose 35.4% to £67.00/MWh, as lower wind generation projections for Monday act to increase demand for gas-fired generation. However, February 24 gas and March 24 gas were down 5.6% week-on-week to 67.30p/th and 66.10p/th respectively. Most seasonal gas contracts fell this week, down by 1.4% on average, with summer 24 and winter 24 gas falling 3.1% and 2.1%, to 69.10p/th and 86.90p/th respectively. All seasonal power contracts traded lower this week, down on average by 2.0%. summer 24 and winter 24 power went down 2.2% and 2.7% respectively, falling to £63.35/MWh and £81.00/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 35.4% to £67/MWh, as reduced wind generation projections for Monday act to increase the reliance on gas-fired generation, pushing prices up
  • Opposing this, February 24 power slipped 6.1% to £65.25/MWh and March 24 power decreased 3.9% to £61.75/MWh.

Annual October contract

  • Q224 power moved 2.0% lower at £62.50/MWh.
  • The annual April 24 contract lost 2.5% to £72.18/MWh, 53.7% lower than the same time last year (£155.75/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 1.1% to £90.50/MWh, opposing the movement seen across its baseload counterpart
  • February 24 peak power declined 3.3% at £76.20/MWh, and March 24 peak power decreased 5.1% to £68.60/MWh.

Annual October contract

  • The annual April 24 peak power rose 4.6% to £81.88/MWh
  • However, this is 47.3% lower than the same time last year (155.4/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 2.0%.
  • Summer 24 power decreased 8.0% to £64.75/MWh, and winter 24 fell 5.4% to £83.25/MWh.

Seasonal peak power curve

  • Most seasonal peak power contracts lowered this week, however on average prices rose 3.9%
  • Summer 24 gas dropped 2.6% to £67.75/MWh and summer 25 gas fell 3.9% to £73.50/MWh, while winter 24 peak power increased 10.3% to £96.00/MWh.

Commodity price movements

Oil and coal

  • Continuing its recent upward trend, Brent crude oil rose 2.7% week-on-week to average $80.19/bl
  • We saw the commodity continue to be impacted by the war in the Middle East, and changes to global shipping routes in the wake of attacks on vessel ships in the Red Sea – with vessels taking longer routes, leading to greater shipping premiums
  • Further bullish sentiment came after EIA data showed that U.S. crude stockpiles fell more than expected, and news that Chinese central banks will undertake stimulus measures to boost the Chinese economy and oil demand by extension
  • Brent crude oil is set to experience a bullish year ahead as forecasts project growth in oil demand, pushing the price of the commodity up as supply levels remain restricted following OPEC+ supply cuts

Carbon (UK and EU ETS)

  •  We observed diverging price movements across the carbon markets, with UK ETS carbon registering a marginal week-on-week gain of 0.1% to average £34.59/t – whereas EU ETS carbon continued its recent fall to average €63.41/t, down 1.8% compared to last week’s average
  •  The bearish sentiment seen across EU ETS carbon prices is driven by weak industrial power demand across Europe, in tandem with strong EU gas storage stocks suppressing gas prices
  •  Furthermore, stronger week-on-week wind levels acted to increase the share of renewable power contributing to the generation mix, reducing the reliance on more expensive forms of power generation
  •  Looking into the future, it is anticipated that UK ETS carbon prices will fall as policy uncertainty drives bearish fundamentals, paired with an oversupply of UK carbon allowances

Wholesale price snapshot – Friday-on Friday

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