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Energy Wholesale Market Review, 06 May 2022

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This week saw mixed price movements; near-term gas and power contracts recorded strong losses, whilst longer dated seasonal contracts increased. Day-ahead gas fell 48.0% to 65.00p/th, following a prominent decline in price observed on Friday 6 May. Prices were driven by strong system oversupply aided by higher Norwegian flows alongside reduced LDZ demand, amid forecasts of seasonally-high temperatures across the UK. Following the strong drop on the gas day-ahead contract, the day-ahead power contract followed, falling 40.6% to £95.00/MWh. The aforementioned near-term bearish drivers fed through to the June 22 gas contract, which was down 4.8% at 147.63p/th, but the July 22 gas increased 5.5% to 184.62p/th. Longer dated seasonal contracts enjoyed stronger price growth, up by 14.4% on average, with winter 22 and summer 23 gas increasing 6.0% and 9.6% respectively, lifting to 246.00p/th and 186.85p/th, remaining volatile amid the ongoing future gas supply concerns. Following their gas counterparts, all seasonal power contracts boosted this week, up on average by 6.6%, as winter 22 and summer 23 grew 5.7% and 7.4% respectively, rising to £242.00/MWh and £175.00/MWh.

Baseload electricity
Day-ahead power fell 40.6% to £95.00/MWh, following strong bearish movements set from its gas countpart contract. June 22 power slipped 0.9% to £167.00/MWh while July 22 power increased 8.2% to £197.00/MWh.		Q322 power moved 10.3% higher to £215.00/MWh. The annual October 22 contract lost 3.4% to £189.25/MWh, 214.0% higher than the same time last year (£60.27/MWh).
Forward Curve Comparison		Annual April Contract
Peak electricity
Day-ahead peak power was down 36.0% to £110.00/MWh, following baseload power lower. June 22 peak power gained 5.4% at £194.65/MWh, and July 22 peak power increased 12.0% to £219.80/MWh.		The annual October 22 peak power rose 5.0% to £248.50/MWh This is 310.7% higher than the same time last year (60.5/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts boosted this week, up on average by 6.6%. Winter 22 and summer 23 lifted 5.7% and 7.4% respectively, rising to £242.00/MWh and £175.00/MWh.		All seasonal peak power contracts boosted this week, up 5.5% on average. Winter 22 and summer 23 peak power increased 4.6% and 5.6% respectively, rising to £299.20/MWh and £197.80/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude prices rose 3.4% this week to average $109.59/bl. Brent crude prices saw price growth across this week, reversing recent trends, with the most prominent period of growth seen in the latter stages of the week. Prices were buoyed by news that proposals have been put forward by the EU to implement a phased oil embargo on Russia, feeding future supply concerns in the market, in what is already a tight global landscape for crude supplies. However, price rises this week were capped by ongoing lockdown measured implemented in China, weighing on short-term demand growth outlook API 2 coal rose 4.8% to average $235.00/t.		Carbon markets experienced shared upward price growth this week, with EU ETS carbon up 7.3% to average €88.67/t, and UK ETS carbon rising 2.2% to average £83.01/t. EU carbon prices were driven lower by weakening global markets and light trading volumes towards the end of the week, a trend consistent over the last fortnight. In addition, general uncertainty within the market, fuelled by the conflict between Russia and Ukraine, continues to prompt some financial traders to sell off their volumes
Wholesale price snapshot