Energy Wholesale Market Review, 1 November 2021

Headlines

All gas and power contracts moved lower this week. Gas contracts along the curve were pushed lower by expectations of increased Russian supply to Europe within the next week, after President Putin informed Gazprom to flow gas into Europe once it has filled its domestic stocks. Day-ahead gas dropped 19.5% to 165.00p/th, with further pressure from higher LNG send-out and an oversupplied system. December 21 gas fell 21.1% to 180.00p/th and summer 22 gas slipped 3.9% to 107.60p/th. Day-ahead power lost 27.6% to £131.00/MWh, weighed on by reduced gas prices and forecasts of stronger wind generation on Monday. December 21 power decreased 16.5% to £182.00/MWh and the summer 22 contract moved 4.1% lower to £107.25/MWh. Brent crude oil slipped just 0.04% to average $84.99/bl. Prices were pushed lower during the week amid an unexpected rise in US crude stocks and rising COVID-19 cases, although expectations that OPEC+ will not significantly raise its output helped claw back some losses on Friday. Meanwhile, UK ETS carbon traded 2.2% lower to average £55.72/t.

Baseload electricity
  • Day-ahead power fell 27.6% to £131.00/MWh, with stronger wind generation forecast on Monday.
  • November 21 power dropped 15.7% to £179.62/MWh and December 21 power lost 16.5% to £182.00/MWh.
  • Q122 power declined 17.2% to £180.00/MWh.
  • The annual April 22 contract moved 4.4% lower to £108.63/MWh, but was 140.0% higher than the same time last year (£45.26/MWh).
Forward Curve Comparison

 

Annual April Contract

Peak electricity
  • Day-ahead peak power lost 22.4% to £159.00/MWh, following its baseload counterpart lower.
  • November 21 peak power dropped 27.7% to £235.00/MWh, and December 21 peak power slipped 4.8% to £275.00/MWh.
  • Annual April 22 was unchanged at £138.50/MWh.
  • This was 169.8% higher than the same time last year (£51.33/MWh).

Forward curve comparison

 

Annual April contract

 

Seasonal power prices

Seasonal baseload power contracts

 

Seasonal baseload power curve

 

  • All seasonal power contracts decreased, down by 5.9% on average.
  • Summer 22 power lost 4.1% to £107.25/MWh and winter 22 power fell 4.8% to £110.00/MWh.
  • Seasonal peak power contracts were unchanged this week.
  • Summer 22 peak power remained at £124.00/MWh, while winter 22 peak power was £153.00/MWh.
Commodity price movements

Oil and Coal

 

Carbon

  • Brent crude inched 0.04% lower to average $84.99/bl, this week.
  • Prices fell away during the week after opening at $86.13/bl on Monday, amid an unexpected rise in US crude stocks and rising COVID-19 cases. In addition, reports that talks between Iran and other nations, that could result in the lifting of US sanctions, are set to resume by the end of November further weighed on prices.
  • However, expectations that OPEC+ will not significantly raise its oil production levels helped claw back some losses on Friday.
  • UK ETS carbon traded 2.2% lower to average £55.72/t. Conversely, EU ETS carbon lifted 1.7% to average €59.09/t.
  • UK ETS prices were driven lower by falling gas prices along with high levels of wind generation during the week, reducing gas-for-power demand.
  • EU ETS carbon hovered between €58.90-59.10/t throughout the week, with downward pressure from wider European gas markets offset by increased EUA demand towards the end of the week.
Wholesale price snapshot 

 

Posted by TEAM on 1 November 2021
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