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Energy Wholesale Market Review, 11 October 2021

Headlines

It was a relatively mixed week for gas and power contracts this week, with the most pronounced losses seen on the far-curve, with near-term contracts continuing to hold onto unseasonably high price points. Day-ahead gas rose 2.2% to 230.00p/th, with the global gas supply outlook remaining notably tight. In Support, day-ahead prices reach their highest ever recorded levels, at 355.00p/th on 6 October . Day-ahead power fell 0.9% to £213/MWh, but remains well above seasonal norms, buoyed by strong gains made in gas contracts and lowering wind outturn entering the weekend and next week. November 21 gas was up 2.9% at 256.43p/th, and December 21 gas increased 3.7% to 264.42p/th. Most seasonal gas contracts declined this week, down by 5.7% on average, while both summer 22 and winter 22 gas dropped 14.4% and 13.1% respectively, subsiding to 99.33p/th and 102.81p/th. Most seasonal power contracts declined this week, down on average by 3.1%, as summer 22 power decreased 12.1% to £105.50/MWh, while winter 22 fell 10.6% to £110.00/MWh.

Baseload electricity
Day-ahead power fell 0.9% to £213/MWh, following but remains well above seasonal normal prices, driven by lower renewable output and higher gas prices. November 21 power climbed 2.0% at £255/MWh and December 21 power increased 2.0% to £250/MWh.		Q122 power moved 8.3% higher to £260/MWh. The annual April 22 contract lost 11.3% to £107.75/MWh, 124.9% higher than the same time last year (£47.9/MWh).
Forward Curve Comparison		Annual October Contract
Peak electricity
Day-ahead peak power remained the same at £235.00/MWh, holding on to its elevated price point. November 21 peak power declined 6.2% at £305/MWh, and December 21 peak power increased 2.6% to £299/MWh.		The annual April 22 peak power rose 2.6% to £136/MWh This is 151.6% higher than the same time last year (54.05/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts declined this week, down on average by 3.1%. Summer 22 power decreased 12.1% to £105.50/MWh, while winter 22 fell 10.6% to £110.00/MWh.		Most seasonal peak power contracts boosted this week, up 1.1% on average. Summer 22 power dropped 12.1% to £105.50/MWh, while winter 22 peak power increased 9.3% to £153.00/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude prices rose again this week, up 2.9% to $81.21/bl. Prices also reached a three-year high on 8 October, at $83.19/bl. The global picture of Brent crude remains tight. Higher demand profiles across many global markets with less supply has provided a strong undercurrent of support to price over the last fortnight. For this week in particular, the market also responded to news that OPEC+ would not be looking to increase supply volumes to the market in response to combat market tightness.		The strong bullish sentiment for carbon markets softened this week. Subsequently, the UK ETS fell 9.8% lower to £66.08/t with the EU ETS falling 0.2% to €62.02/t. Wider bullishness from Brent crude markets did lend some support to carbon markets in part, but was offset by what continues to be a particularly volatile period for wholesale markets, discouraging thermal generation and investor buying in a costly marketplace
Wholesale price snapshot