15 February

Headlines

All wholesale gas and power contracts fell this week. Prices continue to be pressured by milder temperatures, lower demand and comfortable gas supplies. This fall was despite a recovery in Brent crude oil prices which went above $65/bl for the first time since November 2018. All baseload power contracts fell week-on-week, following their gas counterparts lower. Day-ahead power was down 9.8% to end the week at £48.5/MWh, a fresh eight-month low. Seasonal power contracts decreased 3.1% on average, with summer 19 power declining 4.7% to £49.2/MWh. The contract hit a fresh eight-month low of £48.8/MWh on 13 February. All gas contracts fell amid an oversupplied gas system following the arrival of several LNG tankers, comfortable flows from Norway and milder temperatures. Day-ahead gas dropped 5.0% to end the week at 46.8p/th, the lowest since 31 October 2017. Seasonal gas contracts fell 1.0% on average, as summer 19 gas fell 2.6% to 45.9p/th, a fresh nine-month low. Brent crude oil rose for the second consecutive week, gaining 1.8% to average $63.4/bl. Within-day oil prices rose above $65.0/bl on 15 February, the first time since 20 November 2018. EU ETS carbon prices fell 9.6% to average €21.0/t. Carbon prices have been pressured by weak EU economic data, whilst warmer temperatures and falling gas prices have reduced demand for buying EUAs. API 2 coal prices dropped 5.5% to average $76.0/t. API 2 coal prices dropped to a 21-month low of $71.3/t on 11 February, amid forecasts of warm temperatures for the rest of February in NW Europe.

Baseload electricity
  • Day-ahead power was down 9.8% to end the week at £48.5/MWh, a fresh eight-month low.
  • Day-ahead power is 1.4% below the same time last-year.
  • March and April 19 power contracts dropped 6.4% and 5.7% to £50.2/MWh and £49.8/MWh respectively.
  • Annual April 19 power was down 3.7% to £53.8/MWh.
  • The contract is 3.7% below the same time last month when it was £60.4/MWh, but 25.3% above the same time last year when it was £43.0/MWh.

Forward curve comparison

Baseload electricity Forward curve comparison 15 February 2019

Annual April Contract

Baseload electricity Annual April contract 15 February 2019

Peak electricity
  • Day-ahead peak power fell 9.1% to £52.5/MWh, remaining £4.0/MWh above its baseload counterpart.
  • Day-ahead peak power is 0.7% lower than the same time last year when it was £52.9/MWh.
  • Month-ahead peak power fell 6.3% to end the week at £54.3/MWh, £4.1/MWh above its baseload counterpart.
  • Week-on-week, annual April 19 peak power declined 3.3% to £59.3/MWh, £5.5/MWh above its baseload power counterpart.
  • The contract was 9.8% below its price last month (£65.8/MWh), but 24.6% higher than its value last year (£47.6/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 15 February 2019

Annual April contract

Peak electricity Annual April contract 15 February 2019

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 15 February 2019

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 15 February 2019

  • Seasonal power contracts dropped 3.1% on average from the previous week.
  • Summer 19 power saw the largest movement, down 4.7% to £49.2/MWh. The contract hit a fresh eight-month low of £48.8/MWh on 13 February.
  • All seasonal peak power contracts went down this week, losing 2.8% on average.
  • The summer 19 peak contract was 4.1% lower, falling to £53.2/MWh, £4.0/MWh above its baseload power counterpart.
Commodity price movements

Oil and Coal 

Seasonal power prices Seasonal baseload power curve 15 February 2019 Commodity price movements Oil and coal 15 February 2019

Carbon

Commodity price movements Carbon 15 February 2019

    • Brent crude oil rose for the second consecutive week, gaining 1.8% to average $63.4/bl.
    • Within-day oil prices rose above $65.0/bl on 15 February, the first time since 20 November 2018.
    • Oil prices found support last week from news that OPEC production cuts were on course to reach the 1.2mn bpd target. This outweighed concerns of lower global demand amid weak economic growth, and news that US oil production was increasing.
    • API 2 coal prices dropped for the third consecutive week, down 5.5% to average $76.0/t.
    • API 2 coal prices dropped to a 21-month low of $71.3/t on 11 February, amid forecasts of warm temperatures for the rest of February in NW Europe.
  • EU ETS carbon prices fell 9.6% to average €21.0/t. Within-day carbon prices fell to a fresh two-month low of €19.8/t on 13 February.
  • Carbon prices have been pressured by weak EU economic data, whilst warmer temperatures and falling gas prices have reduced demand for buying EUAs.
  • This week, BEIS confirmed that the government will not issue or auction any 2019 EUAs “until further notice”. This also pressured EU ETS prices and prompted speculation that some UK companies would now sell their allowances.
  • Forecasts of milder weather for the remainder of February will pressure EU ETS carbon prices as conventional power demand drops across NW Europe, easing demand for EUAs.
Wholesale price snapshot

Wholesale price snapshot 15 February 2019

Posted by TEAM on 18 February 2019
  • Wholesale Market

    • 2019 (19)
    • +2018 (17)
  • Blog & News Archive

    • 2019 (35)
    • +2018 (59)
    • +2017 (32)
    • +2016 (33)
    • +2015 (57)
    • +2014 (26)
    • +2013 (13)
    • +2012 (8)
    • +2010 (1)