Headlines
It was a collectively bullish week across most tracked gas and power contracts last week. In support of this, day-ahead gas rose 0.1% to 74.30p/th, following reduced wind output forecasts across the week ahead, acting to raise total domestic gas-for-power demand. However, stronger gains were limited by above-average temperatures, acting to reduce heating demand across GB. Likewise, experiencing a gain greater than its gas counterpart, day-ahead power rose 3.7% to £73.00/MWh, similarly supported by reduced wind generation projections, acting to tighten system margins and increase the reliance on more expensive forms of power generation. Similarly, June 24 gas was up 2.5% at 73.60p/th, and July 24 gas increased 3.5% to 73.45p/th. All seasonal gas contracts boosted last week too, up by 3.1% on average, with winter 24 and summer 25 gas increasing 3.7% and 5.4% respectively, lifting to 93.40p/th and 87.50p/th. Most seasonal power contracts boosted last week, up on average by 3.5%, as winter 24 and summer 25 expanded 1.8% and 5.7% respectively, rising to £81.25/MWh and £75.25/MWh, whereas summer 26 fell 1.0% to £63.50/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power rose 3.7% on 3 May to £73.00/MWh, following forecasts of reduced wind generation in the week beginning 6 May acting to tighten system margins
- June 24 power slipped 3.5% at £65.25/MWh and July 24 power increased 7.2% to £66.75/MWh
Annual October contract
- Q324 power moved 3.1% higher to £68.25/MWh
- The annual October 24 contract rose 3.6% to £78.25/MWh, 37.0% lower than the same time last year (£124.25/MWh)
Peak electricity
Forward curve comparison
- Day-ahead peak power was up 15.5% to £76.25/MWh, following its baseload counterpart higher
- June 24 peak power gained 5.3% at £71.25/MWh, and July 24 peak power increased 6.9% to £72.75/MWh
Annual October contract
- The annual October 24 peak power rose 2.9% to £89.83/MWh
- However, this remains 50.2% lower than the same time last year (180.25/MWh)
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts boosted last week, up on average by 3.5%
- Winter 24 and summer 25 expanded 1.8% and 5.7% respectively, rising to £81.25/MWh and £75.25/MWh
Seasonal peak power curve
- All seasonal peak power contracts boosted last week, up 3.5% on average
- Winter 24 and summer 25 peak power increased 0.8% and 6.3% respectively, rising to £93.75/MWh and £80.25/MWh
Commodity price movements
Oil and coal
- We saw the continuation of bearish movements across Brent crude last week, opposing the overall upward movements seen across the January – March 2024 period
- This followed peace talks in Cairo, surrounding the Israel-Hamas conflict, acting to reduce market concern surrounding the potential for the conflict to grow larger
- Moreover, in the first half of the week, US inflation data acted to reduce the potential for imminent interest rate cuts, keeping oil demand higher as economic growth remains impacted, before the U.S Federal Reserve announced that interest rates would remain unchanged on 2 May
- Likewise, increased U.S crude production is acting to reduce supply concerns arising due to continued OPEC+ supply cuts
- Increased US production levels are set to counterbalance increased Chinese demand, leading to the commodity finding greater influence from geopolitical situations
Carbon (UK and EU ETS)
- Despite above-average temperatures across the UK, UK ETS carbon prices were supported by reduced wind generation on the system, acting to tighten system margins
- As a result, UK ETS carbon prices rose 0.1% to average £36.60/t
- Likewise, gains were seen across EU ETS carbon, rising 3.5% to average €69.49/t despite above-average temperatures across Europe during last week, which acted to decrease power demand
- However, gains were supported by a drop in coal prices across the week. This typically makes it more economical to generate power using coal-fired generation, a more expensive fuel source, in turn raising carbon prices
- Carbon prices will find support by lower auction volumes scheduled throughout May, due in part by public holidays both domestically and in Europe
- As demand levels ease with warmer temperatures and as gas prices fall, coal-fired output continues to decline both domestically and across Europe
Wholesale price snapshot – Friday-on Friday
