This week power and gas contracts continued to follow the bearish trend seen across much of 2023 to date, inclusive of longer-term contracts. We observed above average temperatures for large periods across the reporting window – acting to supress gas and power demand. Subsequently, day-ahead gas fell 13.4% to 57.60p/th, following milder weather and reduced demand mitigating the impact of interrupted Norwegian flows due to maintenance. Day-ahead power fell 15.0% to £65.00/MWh, following its gas counterpart lower paired with easing demand throughout the week. June 23 gas was down 14.4% at 58.20p/th, and July 23 gas decreased 15.4% to 57.10p/th. All seasonal gas contracts declined last week, down by 7.1% on average, while both winter 23 and summer 24 gas dropped 9.2% and 9.0% respectively, subsiding to 113.00p/th and 111.00p/th. All seasonal power contracts declined this week, down on average by 9.4%, as winter 23 power decreased 12.7% to £123.50/MWh, while summer 24 fell 11.3% to £102.00/MWh.
Forward curve comparison
- Day-ahead power fell 15.0% to £65/MWh, following a drop in demand levels and falling gas prices.
- June 23 power slipped 12.5% at £71.75/MWh and July 23 power decreased 15.9% to £74/MWh.
Annual October contract
- Q323 power moved 12.9% lower to £79.5/MWh.
- The annual October 23 contract lost 12.1% to £112.75/MWh, 30.3% lower than the same time last year (£161.75/MWh).
Forward curve comparison
- Day-ahead peak power was down 16.2% to £69.13/MWh, following its baseload counterpart lower.
- June 23 peak power declined 15.4% at £73.8/MWh, and July 23 peak power decreased 11.7% to £80.75/MWh.
Annual April contract
- The annual October 23 peak power fell 11.2% to £140.25/MWh.
- This is 31.0% lower than the same time last year (203.35/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined this week, down on average by 9.4%.
- Winter 23 power decreased 12.7% to £123.50/MWh, while summer 24 fell 11.3% to £102.00/MWh.
Seasonal baseload power curve
- All Seasonal peak power contracts declined this week, down 10.8% on average.
- Winter 23 and summer 24 peak power dropped 12.7% and 9.0% respectively, falling to £163.75/MWh and £116.75/MWh.
Commodity price movements
Oil and coal
- Following tightening US supplies, fears of OPEC+ supply cuts, and growing optimism that US lawmakers will reach an agreement to raise the debt ceiling, brent crude oil registered a 1.8% gain week-on-week to average $76.91/bl.
- As China returns to pre-COVID growth levels, demand for the oil looks set to increase – tightening the market and impacting global supply levels.
- This bullish sentiment is pushed further by fears surrounding a Russian and OPEC+ supply cut looming ahead, acknowledging previous cuts saw prices spike.
Carbon (UK and EU ETS)
- Continuing the recent trend, both ETS schemes registered losses this week, more notable than the week previous. The EU ETS registered a drop of 3.7% to average €84.87/t, while the UK ETS saw a decrease of 5.5% to average £55.80/t. These losses can be attributed to the recent warm weather across Europe, coupled with increased wind generation across the UK.
- The EU ETS reached the lowest value seen in four months at €83.16/t on 26 May after prices had dropped below a key technical level in the previous session and gas prices posted the highest day-on-day loss in over two months on 25 May.