Energy Wholesale Market Review – 30 June 2023


This week, we observed mixed price movements. Largely, all gas contracts recorded gains whilst baseload power contracts saw a varied outturn. Firstly, day-ahead gas rose 5.4% to 84.93p/th, following extensive maintenance at Norwegian gas production facilities across the North Sea – acting to tighten gas supply. However, further gains were limited by elevated temperatures across the UK, stifling gas demand. Furthermore, strong European gas storage levels aids in offsetting the reduced Norwegian flows. Opposing the gain experienced across gas contracts, day-ahead power followed a prominent price decline, falling 21.3% to £63.00/MWh, following notable higher wind generation in tandem with reduced GB demand. The aforementioned bullish gas price drivers fed through to the month-ahead contracts, as July 23 gas rose 6.9% at 87.00p/th, and August 23 gas increased 7.6% to 87.40p/th. Similarly, all seasonal gas contracts boosted last week, up by 1.5% on average, while both winter 23 and summer 24 gas increased 0.8% and 2.0% respectively, lifting to 131.00p/th and 126.50p/th. Experiencing a mixed trend across seasonal power contracts, an overall reduction was registered this week, with prices down on average by 0.5%, as winter 23 power decreased 2.5% to £128.25/MWh, while summer 24 expanded 0.4% to £113.50/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 21.3% to £63/MWh, following higher wind generation in tandem with reduced power demand
  • July 23 power remained level at £92/MWh, and August 23 power increased 2.2% to £92/MWh

Annual October contract

  • Q323 power moved 2.2% higher to £94/MWh.
  • The annual October 23 contract lost 1.1% to £120.88/MWh, 33.2% lower than the same time last year (£181/MWh)

Peak electricity

Forward curve comparison

  • Day-ahead peak power was up 0.6% to £91.25/MWh, despite its baseload counterpart registering losses
  • However, July 23 peak power declined 8.9% at £92.25/MWh, and August 23 peak power decreased 1.8% to £95.50/MWh

Annual April contract

  • The annual October 23 peak power rose 3.4% to £140.50/MWh
  • However, this is 48.4% lower than the same time last year (272.30/MWh)

Seasonal power prices

Seasonal baseload power contracts

  • Seasonal power contracts declined this week, down on average by 0.5%
  • Winter 23 power decreased 2.5% to £128.25/MWh, while summer 24 expanded 0.4% to £113.50/MWh

Seasonal baseload power curve

  • All Seasonal peak power contracts declined this week, down 3.3% on average
  • Winter 23 and summer 24 peak power dropped 4.3% and 2.2% respectively, falling to £160.75/MWh and £120.25/MW

Commodity price movements

Oil and coal

  • Losses were recorded across Brent crude prices, with a 2.6% drop to average $73.72/bl
  • The bearish sentiment was strengthened by trader concerns of oversupply as expectations of weak economic growth, particularly from China which is experiencing weaker-than-anticipated growth, outweigh Saudi Arabia’s output cuts
  • However, stronger losses were offset by news from the American Petroleum Institute that U.S. crude inventories fell by a larger than expected 2.4mn barrels – tightening supply levels
  • The outlook for oil is increasingly volatile as OPEC+ announced that global oil demand will rise by 110mn barrels a day by 2045. However, the IEA predicts that demand growth will fall to 400,000 barrels per day in 2028

Carbon (UK and EU ETS)

  • Reversing from the recent trend of price gains, the EU ETS fell 3.7% to average 88.05/t, and the UK ETS shrank 8.4% to average 52.96/t. This is a result of increased wind generation acting to weigh upon the output from thermal generation sources this week
  • Despite extensive Norwegian gas plant maintenance, extensive European gas storage stocks minimized significant squeezes across the natural gas market – further supporting the bearish sentiment seen across carbon prices.
  • Following a consultation on what the EU’s 2040 climate target should be, respondents stated that the EU ETS should be a climate policy “centerpiece” towards reaching net zero

Wholesale price snapshot – Friday-on Friday

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