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Energy Wholesale Market Review, 03 July 2020

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Nearly all GB gas and power contracts increased this week. Day-ahead power was the only exception, falling 4.6% to £26.00/MWh, with high levels of wind generation towards the end of the week weighing on the contract. The new month-ahead contract (August) gained .3% to £32.10/MWh and the September contract rose 2.0% to £34.99/MWh. Seasonal power contracts climbed 3.6% on average with summer contracts showing the largest gains. Winter 20 power lifted 1.2% to £45.25/MWh, while summer 21 power jumped 4.0% to £41.24/MWh. Day-ahead gas rose 5.9% to 14.25p/th, amid increased demand for both power generation and residential heating. August 20 gas jumped 8.3% to 15.02p/th and the September contract lifted 2.4% to 17.25p/th. Seasonal contracts climbed 3.6% on average, and similar to the power market saw larger gains on the summer contracts. Winter 20 gas edged 2.4% higher to 33.12p/th and the summer 21 contract gained 4.3% to 31.00p/th. Brent crude oil was little changed on average this week with prices slipping 0.2% to average $41.89/bl. API 2 coal prices climbed 3.1% to average $57.84/t this week, reaching a 5-month high of $58.50/t on Thursday. EU ETS carbon continued to reach new multi-month highs this week, gaining 6.4% to average €26.58/t.

Baseload electricity
Day-ahead power fell 4.6% to £26.00/MWh, following rising levels of wind generation towards the end of the week. August 20 power gained 2.3% to £32.10/MWh and the September contract rose 2.0% to £34.99/MWh.		Q420 power lifted 1.6% to £43.05/MWh. The annual October 20 contract rose 2.5% to £43.25/MWh, 15.0% lower than the same time last year (£50.91/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power climbed 3.6% to £32.75/MWh, opposing the direction of its baseload counterpart. August 20 peak power gained 3.9% to £36.55/MWh, and September 20 peak power rose 12.2% to £39.71/MWh.		Annual October 20 peak power lifted 3.6% to £49.61/MWh. This is 14.2% lower than the same time last year (£57.81/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Seasonal power contracts rose by 3.6% on average. Winter 20 lifted 1.2% to £45.25/MWh and summer 21 jumped 4.0% to £45.25/MWh.		All seasonal peak power contracts climbed this week, up 3.4% on average. Winter 20 peak power gained 3.5% to £53.83/MWh and summer 21 peak power increased 3.7% to £45.39/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil was little changed on average this week, slipping 0.2% to average $41.89/bl. Oil prices started the week at $40.75/bl after reaching a 3-month high of $43.82/bl the previous week, amid growing concerns of increasing COVID-19 cases in the US and South America. Prices did find support throughout the week climbing to $42.65/bl by Friday morning. Prices were pushed higher as production cuts continued to bite with some OPEC+ members over-complying with their output cut commitments. However, gains were limited as global COVID-19 cases continued to rise with the US posting new daily global records of 50,000 and 55,000 new cases on Wednesday and Thursday, respectively.		API 2 coal prices climbed 3.1% to average $57.84/t this week, reaching a 5-month high of $58.50/t on Thursday. EU ETS carbon continued to reach new multi-month highs last week, gaining 6.4% to average €26.58/t. On Thursday, EU ETS carbon rose to €27.52/t, its highest level since mid-August 2019, on increased auction activity.
Wholesale price snapshot