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Energy Wholesale Market Review, 14 May 2021

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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		Annual April Contract
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		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
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		Carbon
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