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Energy Wholesale Market Review, 13 August 2021

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The bullish picture for gas and power markets generally continued this week, with most contracts rising or holding onto recent gains. Subsequently, day-ahead gas rose 0.9% to 110.00p/th, supported by a back-drop of low gas in storage across Europe and the UK. Day-ahead power looking at Friday-on-Friday price movements, remained unchanged at £105/MWh, maintaining recent highs, continuing to take direction from record highs in near-term gas contracts. September 21 gas was up 1.8% at 113.18p/th, and October 21 gas increased 2.6% to 115.33p/th. All seasonal gas contracts grew this week, up by 5.1% on average, with both winter 21 and summer 22 gas rising 3.9% and 7.9% respectively, lifting to 115.91p/th and 71.89p/th. Most seasonal power contracts boosted this week, up on average by 3.5%, as winter 21 and summer 22 expanded 1.1% and 5.7% respectively, increasing to £113.25/MWh and £78.25/MWh. Brent crude oil slipped for the second consecutive week this week. As such, prices averaged 3.2% lower than the previous week at $70.19/bl. The most notable price set-backs were observed at the week’s start, driven by news of increased travel restrictions in China amid rising COVID-19 cases, fuelling demand recovery fears. Carbon markets rose for the third consecutive week, building on strong recorded gains. Subsequently the UK ETS rose 3.1% to £48.09/t, with the EU ETS sharing these bullish price movements, up 2.6% to €56.77/t.

Baseload electricity
Day-ahead power remained unchanged at £105/MWh, holding onto recent highs, continuing to take direction from high gas prices. September 21 power slipped 0.7% at £109.25/MWh and October 21 power increased 6.9% to £111.75/MWh.		Q421 power held at £115/MWh. The annual October 21 contract rose 3.0% to £95.75/MWh, 111.9% higher than the same time last year (£45.18/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power was up 0.9% to £110.00/MWh, following gains from its baseload counterpart. September 21 peak power declined 2.9% at £109.65/MWh, and October 21 peak power decreased 5.2% to £108.85/MWh.		The annual October 21 peak power lost 2.4% to £95.63/MWh. This is 86.8% lower than the same time last year (51.19/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts rose this week, up on average by 3.5%, highlighting notable backwardation. Winter 21 and summer 22 expanded 1.1% and 5.7% respectively, growing to £113.25/MWh and £78.25/MWh.		Most seasonal peak power contracts declined this week, down 1.5% on average. Winter 21 gas dropped 5.2% to £113.25/MWh, while summer 22 peak power increased 2.0% to £78.00/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil slipped for the second consecutive week. As such, prices averaged 3.2% lower than the previous week at $70.19/bl. The most notable price set-backs were observed at the week’s start, driven by news of increased travel restrictions in China amid rising COVID-19 cases, fuelling demand recovery fears. Sustained losses to prices this week were capped by support from OPEC+ towards the week’s end however, with confirmation the group have kept their original demand forecasts unchanged despite these demand concerns.		Carbon markets rose for the third consecutive week, building on strong recorded gains. Subsequently the UK ETS rose 3.1% to £48.09/t, with the EU ETS sharing these bullish price movements, up 2.6% to €56.77/t. The UK ETS also reached a two-month high on 12 August, sitting at £49.15/t. Bullish supporting trends across carbon markets remain relatively consistent. Tighter gas markets, across North-West Europe and the UK bolster prices. Similarly, lowering auction volumes in August continue to lend support, driving increased competition for limited EUA’s.
Wholesale price snapshot