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Energy Wholesale Market Review, 15 March 2019

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All wholesale power and gas contracts fell week-on-week, with day-ahead gas dropping to a 20-month low as comfortable gas supplies and mild temperatures continue. Falling gas prices and strong wind generation drove day-ahead power prices to 18-month lows. All baseload power contracts fell week-on-week. Day-ahead power was down 1.0% to end the week at £47.5/MWh. The contract fell to £43.4/MWh on 14 March, a fresh 18-month low, amid forecasts of higher wind generation the following day. All seasonal power contracts continued to fall further, dropping 4.2% on average. Summer 19 power fell to an 11-month low of £45.5/MWh, while winter 19 power hit a nine-month low of £55.0/MWh. All gas contracts fell week-on-week, as above seasonal normal temperatures continued to drive down gas demand, leaving the gas system oversupplied for most of the week. Day-ahead gas dropped 8.8% to end the week at a 20-month low of 39.0p/th, 41.8% below the same time last year. Seasonal gas contracts decreased 6.6% on average, with summer 19 gas experiencing the biggest change falling 9.0% to end the week at 39.0p/th, a 13-month low. Brent crude oil prices rose this week, up 1.8% to average $66.9/bl. Within-day oil prices rose to a fresh four-month high above $68.0/bl on 14 March. EU ETS carbon prices slipped 1.1% to average €22.5/t. API 2 coal prices fell for a second consecutive week, down 3.7% to average $75.8/t, as milder temperatures in the northern hemisphere, combined with higher wind generation in Europe, dampened coal demand.

Baseload electricity
Day-ahead power was down 1.0% at £47.5/MWh. The contract fell to £43.4/MWh on 14 March, an 18-month low, amid forecasts of higher wind generation. April and May 19 power went down 5.4% and 6.2% to £45.1/MWh and £44.3/MWh, respectively.		Annual April-19 power was 5.3% lower week-on-week, falling to £50.3/MWh. The contract is 6.6% below the same time last month (£53.8/MWh), but 14.8% above the same time last year when it was £43.8/MWh.
Forward curve comparison		Annual April Contract

Peak electricity
Day-ahead peak power slipped 2.9% to £49.5/MWh, just £2.0/MWh above its baseload counterpart. Day-ahead peak power is 30.3% lower than the same time last year when it was £71.0/MWh. April and May 19 peak power lost 5.0% and 5.6% to £47.6/MWh and £47.7/MWh, respectively.		Annual April 19 peak power dropped 4.9% to £55.6/MWh, remaining £5.3/MWh above its baseload power counterpart. The contract was 6.3% below its price last month (£59.3/MWh), but 14.0% higher than its value last year (£48.8/MWh).
Forward curve comparison		Annual April contract

Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts continued to fall further, dropping 4.2% on average. Summer and winter 19 power fell to £45.5/MWh and £55.0/MWh, respectively.		All seasonal peak power contracts went down this week, dropping by 4.2% on average. The summer 19 peak contract was 5.4% lower at £49.2/MWh, £3.7/MWh above its baseload power counterpart.

Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices rose this week, up 1.8% to average $66.9/bl. Within-day oil prices rose to a fresh four-month high above $68.0/bl on 14 March, supported by concerns of tighter global supply. OPEC’s Monthly Oil Market Report suggests that the group could extend production cuts beyond June as demand is forecast lower than previously expected whilst growth in non-OPEC production is expected to rise. API 2 coal prices fell 3.7% to average $75.8/t. Milder temperatures in the northern hemisphere, combined with higher wind generation in Europe, has pushed conventional-fired power generation off the system, lowering demand for coal and pressuring API 2 coal prices further.		EU ETS carbon prices slipped 1.1% to average €22.5/t. Carbon prices found some support this week after parliament voted against the prospect of a ‘no-deal’ Brexit. However, prices remain pressured by Brexit uncertainty, and by warmer temperatures easing conventional-fired power generation demand as gas prices fall further amid comfortable gas supplies.

Wholesale price snapshot