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Energy Wholesale Market Review, 11 October 2019

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Most near-term gas and power contracts decreased this week; however, long-term contracts moved higher. Day-ahead gas fell 28.1% to 23.0p/th, with warmer than expected temperatures resulting in weaker gas demand. In addition, the arrival of three LNG tankers kept the system comfortably supplied. This also weighed on the month-ahead contract, which slipped 1.4% to 42.4p/th. Further along the curve, summer 20 gas rose 2.8% to 44.3p/th and winter 20 gas climbed 2.7% to 53.7p/th. Day-ahead power lost 4.0% to £41.0/MWh, amid strong levels of wind generation throughout the week. November 19 power dropped 0.9% to £49.1/MWh. Seasonal power contracts followed their gas counterparts with summer 20 power lifting 2.0% to £47.7/MWh and winter 20 power gaining 1.8% to £54.8/MWh. Brent crude oil slipped 0.7% to average $58.7/bl, pressured by ongoing concerns of slowing global demand growth and a larger than expected rise in US crude stocks. API 2 coal gained 2.9% to average $67.6/t, driven by lower domestic coal production and low coal stocks in India and a decrease in gas-fired generation in Germany. EU ETS carbon fell 5.2% to average €23.0/t, amid lower thermal generation as a result of strong wind output and ongoing uncertainty surrounding Brexit and US-China trade talks.

Baseload electricity
Day-ahead power lost 4.0% to £41.0/MWh, following its gas counterpart lower. Month-ahead power slipped 0.9% to £49.1/MWh, while December 19 power lifted 0.1% to £52.4/MWh.		Q120 power gained 0.6% to £54.8/MWh. The annual April 20 power contract climbed 1.9% to end the week at £51.2/MWh. This is down 5.9% lower than the same time last year (£54.5/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power lifted 4.6% to £49.0/MWh, £8.0/MWh above its baseload counterpart. November 19 peak power lost 0.9% to £56.2/MWh. December 19 peak power edged 0.2% higher to £58.7/MWh.		Annual April 20 peak power was 1.9% higher at £57.0/MWh, £5.8/MWh above its baseload power counterpart. The contract is 4.0% below its value this time last month (£59.4/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal baseload power contracts rose, increasing 2.5% on average. Summer 20 power gained 2.0% to £47.7/MWh, while winter 20 climbed 1.8% to £54.8/MWh.		Seasonal peak power contracts were 1.9% higher on average. Summer 20 peak power lifted 1.6% to £51.6/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil slipped 0.7% to average $58.7/bl. Prices were pressured by ongoing concerns of slowing global demand growth. In addition, a larger than expected rise in US crude stocks provided further downward momentum. However, prices received some support on Friday following reports of a missile attack on an Iranian oil tanker off the coast of Saudi Arabia. API 2 coal prices gained 2.9% to average $67.6/t. Low coal stocks in India and decreasing coal production in the country provided support to coal prices..		EU ETS carbon fell 5.2% to average €23.0/t. Ongoing certainty surrounding Brexit and US-China trade talks pushed prices lower. Additionally, forecasts of strong renewable generation on the continent in the coming weeks and full EUA auction volumes are expected to continue to pressure carbon prices.
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