Energy Wholesale Market Review, 14 May 2021

Headlines

It was a collectively bullish week across most tracked gas and power contracts this week. In support of this, day-ahead gas rose 6.9% to 66.25p/th, following cooler temperatures at the weeks start and higher gas-for-power demand amid weaker wind generation. Day-ahead power rose 18.4% to £82/MWh, finding support from prolonged periods of weaker wind generation in the week, lowering demand and record high carbon prices. June 21 gas was up 10.5% at 68.25p/th, and July 21 gas increased 9.8% to 65.86p/th. Seasonal gas contacts experienced gains, rising by 5.7% on average, with winter 21 and summer 22 gas increasing 8.7% and 7.7% respectively, lifting to 73.77p/th and 51.59p/th. Similar movements were seen in seasonal power contracts, which averaged 6.9% higher, as winter 21 and summer 22 expanded 8.1% and 7.8% respectively, rising to £84.46/MWh and £62.50/MWh. Brent crude oil prices slipped this week, down 0.7% to average $68.18/bl. The weeks start saw supply disruption from a cyber-attack on the US Colonial Pipeline causing a temporary shutdown, supporting oil prices. However, the rising number of COVID-19 cases across India and select parts of Asia ultimately overshadowed the aforementioned bullish price movements. EU ETS carbon prices rose this week, rising 8.9% to average €53.53/t. Prices once again broke all-time record highs, reaching €55.69/t on 14 May.

Baseload electricity
  • Day-ahead power rose 18.4% to £82/MWh, following prolonged periods of weaker wind generation in the week, lowering demand and record highs in carbon markets.
  • June 21 power climbed 11.2% at £77.8/MWh and July 21 power increased 11.4% to £79/MWh.
  • Q321 power moved 10.5% higher to £76.91/MWh.
  • The annual October 21 contract rose 7.9% to £73.48/MWh, 76.1% higher than the same time last year (£41.73/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 14 May 2021

Annual April Contract

Baseload electricity Annual April contract 14 May 2021

Peak electricity
  • Day-ahead peak power was up 23.5% to £87.65/MWh, following gains made from its baseload counterpart.
  • June 21 peak power gained 7.3% at £80.75/MWh, and July 21 peak power increased 1.3% to £77/MWh.
  • The annual October 21 peak power lost 0.0% to £73.5/MWh.
  • This is 56.6% lower than the same time last year (46.94/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 14 May 2021

Annual April contract

Peak electricity Annual April contract 14 May 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 14 May 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 14 May 2021

  • All seasonal power contracts boosted this week, up on average by 6.9%.
  • Winter 21 and summer 22 expanded 8.1% and 7.8% respectively, rising to £84.46/MWh and £62.50/MWh.
  • Most seasonal peak power contracts boosted this week, up 8.4% on average.
  • winter 21 and summer 22 peak power dropped 0.0% and 0.0% respectively, falling to £87.25/MWh and £59.75/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 14 May 2021

Carbon

Commodity price movements Carbon 14 May 2021

  • Brent crude oil prices slipped this week, down 0.7% to average $68.18/bl.
  • At the week’s start, supply disruption from a cyber-attack on US pipelines causing temporary shutdowns, supported prices.
  • However, the underlying COVID-19 crisis across India and select parts of Asia ultimately overshadowed the aforementioned bullish price movements, creating genuine concern for demand recovery entering the summer period, should the current trajectory of COVID-19 cases in these countries continue.
  • EU ETS carbon prices rose this week, rising 8.9% to average €53.53/t. Prices once again broke all-time record highs, reaching €55.69/t on 14 May.
  • EU ETS carbon continues to rise to new highs. This week in particular, gains continue to be driven by expectations of tighter EU ETS policy reform and strong buying demand from speculative traders.
  • Forecasts of temperature reductions in parts of North-West Europe next week may boost prices further still for the coming weeks.
Wholesale price snapshot 

Wholesale price snapshot 14 May 2021

Posted by TEAM on 14 May 2021
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