Energy Wholesale Market Review, 16 April 2021

Headlines

It was a collectively bullish week for gas and power contracts this week, building on price rises in recent weeks. Day-ahead gas rose 7.5% to 56.75p/th, following higher gas for power demand at the weeks start amid colder temperatures. Day-ahead power fell 1.5% to £65.5/MWh, on wavering demand as the week progressed and steadily rising temperatures. May 21 gas was up 9.1% at 51.96p/th, and June 21 gas increased 9.7% to 52.34p/th. All seasonal gas contracts rose this week, up by 5.1% on average, while both winter 21 and summer 22 gas increased 6.8% and 5.5% respectively, lifting to 59.64p/th and 43.55p/th. Elsewhere, seasonal power contracts saw similar gains, up on average by 3.8%, as winter 21 and summer 22 expanded 4.9% and 3.8% respectively, rising to £69.75/MWh and £52.50/MWh. Brent crude oil prices fell this week, down 1.4% to average $63.10/bl. Bearishness stemmed from demand concerns and easing of OPEC+ supply cuts. Prices at the weeks start were largely impacted by the continued uncertainty surrounding COVID-19 travel restrictions, impacting future oil demand growth. EU ETS carbon prices rose this week, rising 4.0% to average €43.32/t. Prices also broke a fresh all-time high again on 15 April at €44.19/t, driven by strong auction EUA demand.

Baseload electricity
  • Day-ahead power fell 1.5% to £65.5/MWh, on account of wavering demand as the week progressed and steadily rising temperatures.
  • May 21 power climbed 7.3% at £61.43/MWh and June 21 power increased 7.7% to £62.5/MWh.
  • Q321 power moved 6.8% higher to £62.23/MWh.
  • The annual October 21 contract rose 4.4% to £61.13/MWh, 44.4% higher than the same time last year (£42.33/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 16 April 2021

Annual April Contract

Baseload electricity Annual April contract 16 April 2021

Peak electricity
  • Day-ahead peak power was down 9.7% to £64.33/MWh, following its baseload counterpart lower.
  • May 21 peak power gained 5.3% at £64.41/MWh, and June 21 peak power increased 6.0% to £66.58/MWh.
  • The annual October 21 peak power lost 2.8% to £68.21/MWh.
  • This is 42.6% lower than the same time last year (47.83/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 16 April 2021

Annual April contract

Peak electricity Annual April contract 16 April 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 16 April 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 16 April 2021

  • All seasonal power contracts boosted this week, up on average by 3.8%.
  • Winter 21 and summer 22 expanded 4.9% and 3.8% respectively, rising to £69.75/MWh and £52.50/MWh.
  • All Seasonal peak power contracts boosted this week, up 2.2% on average.
  • Winter 21 and summer 22 peak power increased 3.5% and 2.0% respectively, falling to £79.19/MWh and £57.23/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Coal 16 April 2021

Carbon

Commodity price movements Carbon 16 April 2021

  • Brent crude oil prices rose this week, up 3.1% to average $65.05/bl.
  • Reports published throughout the week boosted general market optimism with news of increases in global demand forecast. With strict lockdown restrictions across many global economies to stop the spread of COVID-19, it has often had negative effects on demand with reduced economic activity.
  • Offsetting further sustained prices rises were reports of increased COVID-19 cases in India and parts of Europe.
  • EU ETS carbon prices rose this week, rising 2.1% to average €44.23/t. Prices also broke a fresh all-time high again on 15 April at €44.45/t.
  • The recent cold weather across much of Europe supported EU ETS prices this week. In these periods of colder weather, heating demand rises, this is typically met by fossil fuelled generation, feeding through into higher EUA demand.
Wholesale price snapshot 

Wholesale price snapshot 16 April 2021

Posted by TEAM on 19 April 2021
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