Energy Wholesale Market Review, 10 January 2020

Headlines

Most power and gas contracts fell this week, with the day-ahead contracts as the exceptions. Day-ahead gas rose 2.1% to 29.35p/th, following an increase in Brent crude oil and Asian spot LNG prices, despite mild weather in the UK this week. Day-ahead power rose 6.3% to £36.15/MWh, with wind generation dropping midweek to leave a shortfall of supply. February 20 gas was down 3.0% at 31.06p/th, and March 20 gas decreased 3.3% to 30.56p/th. Most seasonal gas contracts increased last week, up by 0.4% on average, but summer 20 and winter 20 gas dropped 0.7% and 0.2% respectively, subsiding to 29.80p/th and 43.57p/th. Most seasonal power contracts declined this week, down on average by 0.6%, as summer 20 power decreased 1.8% to £38.70/MWh, while winter 20 fell 1.0% to £48.70/MWh. Brent crude oil fell by 0.2% to $67.45/bl as global tensions meant that oil was trading above $69/bl on Monday, but ended the week bearishly at below $66/bl. EU ETS carbon slipped by 3.8% to €24.51/t as prices wavered below €25/t in an uncertain week for the global economy. API 2 coal climbed by 1.0% to $57.40/t in the first weekly increase for coal prices since early October.

Baseload electricity
  • Day-ahead power rose 6.3% to £36.15/MWh, following a drop in wind generation midweek.
  • February 20 power slipped 3.4% at £40.00/MWh and March 20 power decreased 3.4% to £39.00/MWh.
  • Q220 power moved 2.7% lower to £38.50/MWh.
  • The Annual April 20 contract lost 1.4% to £43.70/MWh, 19.0% lower than the same time last year (£53.93/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 10 January 2020

Annual October Contract

Baseload electricity Annual April contract 10 January 2020

Peak electricity
  • Day-ahead peak power was down 1.9% to £41.25/MWh, £5.10/MWh above its baseload electricity counterpart.
  • February 20 peak power declined 3.2% at £45.20/MWh, and March 20 peak power decreased 3.2% to £43.00/MWh.
  • The Annual April 20 peak power lost 1.4% to 49.28/MWh.
  • This is 19.1% lower than the same time last year (£60.90/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 10 January 2020

Annual October contract

Peak electricity Annual April contract 10 January 2020

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 10 January 2020

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 10 January 2020

  • Most seasonal power contracts declined last week, down on average by 0.6%.
  • Summer 20 power decreased 1.8% to £38.70/MWh, while winter 20 fell 1.0% to £48.70/MWh.
  • Most seasonal peak power contracts declined this week, down 0.5% on average.
  • Summer 20 and winter 20 peak power dropped 2.1% and 0.9% respectively, falling to £42.75/MWh and £55.80/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Coal 10 January 2020

Carbon

Commodity price movements Carbon 10 January 2020

  • Brent crude oil fell by 0.2% to $67.45/bl.
  • Oil began the week trading at $69.75/bl, with investors remaining cautious on how escalations in the Middle East could disrupt oil supply. Prices remained above $68/bl on 8 January as Iran struck two US military bases in Iraq, before falling below $66/bl on 9 January on the apparent de-escalations in tensions by the US and Iran.
  • Price falls were extended by high US crude inventories, which reported an increase last week.
  • API 2 coal increased 1.0% to average $57.40/t, the first weekly rise since early October 2019. More generally, coal prices continue to be suppressed as oversupply in LNG incentivises greater coal-to-gas switching across Europe.
  • EU ETS carbon lost a further 3.8% to average €24.51/t.
  • Prices wavered below €25/t in an uncertain week for the global economy.
  • EU ETS prices climbed found midweek support on strong auction turnout although this was offset by the lowering in global tensions, where similarly to oil, prices dropped on 9 January.
Wholesale price snapshot

Wholesale price snapshot 10 January 2020

Posted by TEAM on 13 January 2020
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