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Energy Wholesale Market Review, 14 February 2020

Headlines

Most power and gas contracts fell this week as mild temperatures and Storm Ciara passed over the country. Day-ahead gas fell 9.5% to end the week at 20.60p/th. Prices were pushed down due to less gas-for-power demand and declining LNG prices and sunk to a five-month low of 20.40p/th on Thursday. Day-ahead power fell 1.3% to £26.15/MWh as high wind generation sunk prices to the lowest values seen on our records (dating back to 2008) . March 20 gas was down 7.3% at 20.65p/th, and April 20 gas decreased 6.2% to 20.73p/th. Most seasonal gas contracts boosted this week, up by 1.4% on average. Summer 20 gas was the exception and dropped 2.7% to 22.97p/th, while winter 20 gas increased 2.3% to 36.70p/th. Most seasonal power contracts rose this week, up on average by 1.1%, as summer 20 power was again an exception and slipped 1.4% to £33.52/MWh, while winter 20 power rose 2.1% to £43.92/MWh. Brent crude oil fell by 0.7% to $54.99/bl as oil prices fluctuated this week on a mixture of bearish and bullish news. Brent crude oil prices ultimately ended the week higher than last week, the first week-on-week increase in over a month. EU ETS carbon gained 1.1% to €23.59/t as strong EUA auction activity lifted prices to above 24/t near the end of the week. API 2 coal lost 1.3% to $59.64/t as coal-for-power demand struggles on low demand in China due to the outbreak of the coronavirus in China.

Baseload electricity
Day-ahead power fell 1.3% to a record-low of £26.15/MWh due to mild temperatures and high wind generation. March 20 power slipped 2.8% at £31.86/MWh and April 20 power decreased 3.4% to £32.13/MWh.		Q220 power moved 2.2% lower to £33.15/MWh. The Annual April 20 contract rose 0.6% to £38.72/MWh, 25.1% lower than the same time last year (£51.73/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was down 2.8% to £34.70/MWh, following its baseload counterpart lower. March 20 peak power gained 9.2% to £35.81/MWh, and April 20 peak power increased 14.0% to £43.78/MWh.		The Annual April 20 peak power lost 14.0% to 43.78/MWh. This is 24.9% lower than the same time last year (58.27/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts rose this week, up on average by 1.1%. Summer 20 power was an exception and fell1.4% to £33.52/MWh, while winter 20 rose 2.1% to £43.92/MWh.		Most seasonal peak power contracts declined this week, down £12.6% on average. Summer 20 and winter 20 peak power dropped 12.4% and 13.2% respectively, falling to £33.81/MWh and £43.00/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil fell 0.7% to average $54.99/bl as oil prices fluctuated this week on a mixture of bearish and bullish news. Brent crude oil prices ultimately ended the week higher than last week, the first week-on-week increase in over a month. Initially falling at the start of the week, prices began to steady on optimism that muted demand due to the coronavirus outbreak could be easing. This was despite OPEC revising its 2020 oil consumption growth forecast 200,000bpd lower. Prices rose towards the end of the week with deeper supply cuts from OPEC looking increasingly likely. API 2 coal saw small losses this week, falling by 1.3% to average $59.64/t.		EU ETS carbon increased 1.1% to average €23.59/t this week as momentum from the previous week carried through. High auction volume and a general bullish global market meant that EU ETS prices peaked at €24.32/t on 14 February, the highest prices seen so far in the month. EU ETS prices continue to follow a currently uncertain global market, and could raise above €25/t in coming weeks if markets show resurgence.
Wholesale price snapshot