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Energy Wholesale Market Review, 1 May 2020

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Most power and gas contracts fell this week as the UK remained under lockdown, muting demand across the country. Day-ahead gas was an exception and rose 20.9% to 13.60p/th following slightly lower temperatures towards the end of the week. Day-ahead power opposed gas and fell 1.4% to £25.25/MWh as a result of higher wind generation forecasts. June 20 gas was up 0.1% at 13.75p/th, while July 20 gas decreased 0.3% to 15.25p/th. All seasonal gas contracts declined this week, down by 1.3% on average. Winter 20 and summer 21 gas dropped 0.9% and 0.7% respectively, subsiding to 31.75p/th and 28.60p/th. All seasonal power contracts followed gas prices down, slipping on average by 1.7%. Winter 20 power decreased 1.0% to £40.60/MWh, while summer 21 fell 1.5% to £35.85/MWh. Brent crude oil prices rose 2.1% to average $22.35/bl, as the ease of lockdown restrictions in several countries around the world and the build-up to oil production cuts in May helped to support prices. Starting the week at around $21/bl, Brent crude prices fell back under $20/bl the following day on reports that global storage was reaching near maximum capacity. EU ETS carbon prices did not follow oil prices and ultimately fell 2.6% to average €20.05/t. Carbon prices dropped with lower demand in EUA auctions as a result of a national holiday across most of Europe on 1 May.

Baseload electricity
Day-ahead power fell 1.4% to £25.25/MWh on a rise in wind generation towards the end of the week. June 20 power slipped 0.5% at £25.85/MWh and July 20 power decreased 12.1% to £24.40/MWh.		Q320 power moved 1.4% lower to £29.10/MWh The Annual October 20 contract lost 1.2% to £38.23/MWh, 24.5% lower than the same time last year (£50.61/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power followed its baseload counterpart down, falling 2.2% to £26.50/MWh. June 20 peak power declined 0.9% at £29.12/MWh, and July 20 peak power decreased 1.9% to £30.98/MWh.		The Annual October 20 peak power lost 1.9% to 43.45/MWh. This is 23.9% lower than. the same time last year (57.08/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts declined this week, down on average by 1.7%. Winter 20 power decreased 1.0% to £40.60/MWh, while summer 21 fell 1.5% to £35.85/MWh.		All seasonal peak power contracts declined this week, down 2.0% on average. Winter 20 and summer 21 peak power dropped 1.1% and 2.8% respectively, falling to £46.92/MWh and £39.97/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices rose 2.1% to average $22.35/bl this week, as the ease of lockdown restrictions in several countries around the world and the build-up to oil production cuts in May supported prices. Starting the week at around $21/bl, Brent crude prices dropped back under $20/bl the following day on reports that global storage was reaching near maximum capacity. Prices were bolstered midweek by indications from the IEA that US crude inventories had risen by less than expected. Brent prices continued to rose late this week as Donald Trump threatened to revoke military support for Saudi Arabia, should they choose not to cut oil production. With the interests of the US shale industry, the US president told Saudi Arabian leaders: “We are defending your industry while you’re destroying ours.”		API 2 coal saw losses this week, falling 2.8% to average $52.60/t, as demand for the commodity continues to slide. Coal demand has been particularly affected by the fall in LNG prices, which has seen a switch in coal to gas buying in the Asian market. EU ETS carbon prices did not follow oil prices last week and ultimately fell 2.6% to average €20.05/t Carbon prices dropped with lower demand in EUA auctions as a result of a national holiday across most of Europe on 1 May.
Wholesale price snapshot