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Energy Wholesale Market Review, 12 March 2021

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Gas and power contracts experienced bullish price movements this week. Day-ahead gas rose 4.7% to 46.80p/th, generally benefitting from reduced temperatures expected at the start of next week and forecast weaker wind generation, resulting in increased gas-for-power demand as a result. Day-ahead power remained static at £67.00/MWh, comparing Friday-on-Friday price movements. Increased wind generation at the weeks start dampened prices before a notable £20.00/MWh surge on Friday. April 21 gas was up 13.7% at 46.03p/th, and May 21 gas increased 12.8% to 43.36p/th. All seasonal gas contracts rose this week, up by 5.9% on average, as summer 21 and winter 21 gas increased 11.7% and 6.8% respectively, lifting to 44.07p/th and 53.65p/th. All seasonal power contracts climbed this week, up on average by 5.6%. Summer 21 and winter 21 power lifted 9.9% and 6.7% to £55.78/MWh and £64.80/MWh, respectively. Brent crude oil prices rebounded this week, up 6.0% to average $68.83/bl. Demand recovery optimism and positive economic forecasts represented the primary drivers for Brent crude oil prices. EU ETS carbon prices rose 8.4% to average €40.77/t. Prices reached a new all-time high of €42.42/t on 11 March.

Baseload electricity
Day-ahead power remained at £67.00/MWh, as varying wind generation influenced power prices throughout the week, before a £20.00MW/h increase on 12 March. April 21 power climbed 10.3% to £56.92/MWh and May 21 power increased 10.6% to £55.59/MWh.		Q221 power moved 10.1% higher to £56.16/MWh. The annual April 21 contract rose 8.1% to £60.29/MWh, 42.2% higher than the same time last year (£42.4/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power was up 2.6% to £80.00/MWh, benefitting from increased low wind output forecast next week. April 21 peak power declined 14.5% to £46.58/MWh, and May 21 peak power decreased 19.5% to £43.85/MWh.		The annual April 21 peak power contract lost 20.7% to £49.3/MWh. This is 3.5% lower than the same time last year (47.62/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts climbed this week, up on average by 5.6%. Summer 21 and winter 21 rose 9.9% and 6.7% respectively, rising to £55.78/MWh and £64.80/MWh.		All seasonal peak power contracts declined this week, down 21.4% on average. Summer 21 and winter 21 peak power dropped 18.8% and 22.2% respectively, falling to £44.55/MWh and £54.04/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices rebounded this week, up 6.0% to average $68.83/bl. Demand recovery optimism and positive economic forecasts represented the primary drivers for Brent crude oil prices this week. Demand recovery in the aftermath of Coronavirus has continued to generate concern among the market however, there are recent reports that recovery looks more promising than initially projected. Meanwhile, API 2 coal fell 1.5% from the previous week to average $68.34/t.		EU ETS carbon prices rose 8.4% to average €40.77/t. Prices reached a new all-time high of €42.42/t on 11 March. Prices may be weighed upon by warmer weather expected in the UK and Europe at the early part of next week. However, temperatures are forecast to drop notably beyond this which may counteract bearish price movements in the weeks start.
Wholesale price snapshot