Energy Wholesale Market Review – 3 November 2023


Predominantly bearish gas price movements continued this week with strong EU gas storage levels likely influencing these losses across most tracked contracts. Day-ahead gas fell 17.6% to 98.00p/th, following increased wind outturn forecasts reducing gas-for-power demand, coupled with healthy levels of gas supply circulating in the European gas markets. Similarly, day-ahead power fell 5.3% to £90.00/MWh, with increased wind generation projections due to Storm Ciaran outweighing rising consumption forecasts into the weekend and early next week. December 23 gas was down 10.8% at 124.50p/th, and January 24 gas decreased 8.8% to 132.00p/th. All seasonal gas contracts declined last week, down by 5.4% on average, while both summer 24 and winter 24 gas dropped 8.9% and 8.3% respectively, subsiding to 123.50p/th and 137.50p/th. All seasonal power contracts declined this week, down on average by 5.7%, as summer 24 power decreased 9.0% to £101.00/MWh, while winter 24 fell 7.2% to £119.00/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 5.3% to £90.00/MWh, weighed, at least in part, by increased wind generation levels due to Storm Ciaran – softening system margins.
  • December 23 power slipped 11.5% at £102.25/MWh, and January 24 power decreased 6.7% to £121.25/MWh.

Annual October contract

  • Q124 power moved 8.6% lower to £117.00/MWh.
  • The annual April 24 contract lost 8.0% to £110.00/MWh, which was 51.1% lower than the same time last year (£225.00/MWh).

Peak electricity

Forward curve comparison

  • Following its baseload counterpart, day-ahead peak power was down 7.5% to £98.00/MWh.
  • December 23 peak power declined 8.1% at £121.04/MWh, and January 24 peak power decreased 3.9% to £151.29/MWh.

Annual October contract

  • The annual April 24 peak power rose 5.6% to £121.68/MWh.
  • This is 48.9% lower than the same time last year (238.00/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 5.7%
  • Summer 24 power decreased 9.0% to £101.00/MWh, and winter 24 fell 7.2% to £119.00/MWh

Seasonal peak power curve

  • All seasonal peak power contracts declined this week, down 5.6% on average
  • Summer 24 and winter 24 peak power dropped 6.1% and 5.2% respectively, falling to £106.50/MWh and £136.50/MWh

Commodity price movements

Oil and coal

  • Overall, Brent crude prices fell 2.9% last week to average $87.36/bl, as on-going volatility remains prevalent, amid competing market fundamentals.
  • A reported rise in OPEC production output in October led to a softening prices, however supply remains reduced amid extended supply cuts in place until the end of the year.
  • Likewise, weak Chinese manufacturing and non-manufacturing activity data released caused concern around slowing demand from the major consumer, acting to limit price gains across the reporting period.
  • Despite this, bullish fundamentals are currently driven by supply concern amid the Israel-Hamas conflict
  • For the remainder of 2023, price gains are likely as uncertainty surrounding the Israel-Hamas conflict continues to grow, potentially impacting oil producing regions across the Middle East

Carbon (UK and EU ETS)

  • Like many other global commodity markets, carbon prices continue to respond sensitively to wider geopolitical uncertainty surrounding gas markets, with EU ETS prices falling 1.6% to average €78.90/t and UK ETS prices declining 6.5% to average £37.75/t.
  • For the UK more specifically, higher levels of wind generation seen as the week progressed eased demand from fossil fuel fired assets to meet demand.
  • However, a certain amount of price support will still remain from colder seasonal temperatures acting to increase demand for more expensive forms of power generation like gas.
  • Both EU and UK carbon prices are likely to see price support in the coming weeks, as more carbon intensive means of power generation are used to match supply and demand as temperatures fall to below-average.

Wholesale price snapshot – Friday-on Friday

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