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Energy Wholesale Market Review, 17 July 2020

Headlines

A mixed week for the GB energy market saw losses and gains in various gas and power contracts. Day-ahead gas remained at 13.25p/th despite supply concern following a maintenance period on the Nord Stream pipeline. Day-ahead power rose 1.6% to £31.25/MWh as forecasts of lower wind generation throughout the week looked to support prices. August 20 gas was down 2.5% at 13.43p/th and September 20 gas decreased 9.0% to 15.16p/th. Seasonal gas contracts saw mixed direction this week, ultimately rising by 0.1% on average; the winter 20 gas contract dropped 1.8% to 33.53p/th, while summer 21 gas increased 0.2% to 31.38p/th. Most seasonal power contracts declined this week, down on average by 1.2% as winter 20 power decreased 1.5% to £45.81/MWh, while summer 21 fell 1.4% to £41.4/MWh. Brent crude oil prices held steady this week, averaging $43.01/bl. The markets remain uncertain over future demand for the commodity, with the fears of a second wave of coronavirus potentially limiting future growth in the oil contract. EU ETS carbon prices saw volatile movement this week, reaching a 14-year high of €30.57/t on 13 July, driven by supportive changes to weather and rallying European equity markets.

Baseload electricity
Day-ahead power rose 1.6% to £31.25/MWh, having been supported by falling wind generation forecasts throughout the week. August 20 power slipped 5.3% at £30.5/MWh and September 20 power decreased 4.5% to £33.24/MWh.		Q420 power moved 1.6% lower to £43.3/MWh. The annual October 20 contract lost 1.4% to £43.61/MWh, 17.8% lower than the same time last year (£53.07/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 1.5% to £33/MWh. August 20 peak power gained 0.7% at £37.14/MWh, and September 20 peak power increased 3.2% to £41.33/MWh.		The annual October 20 peak power lost 2.3% to £49.21/MWh. This is 17.8% lower than the same time last year (59.86/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts declined this week, down on average by 1.2%. Winter 20 power decreased 1.5% to £45.81/MWh, while summer 21 fell 1.4% to £41.4/MWh.		All seasonal peak power contracts declined this week, down 2.3% on average. Winter 20 and summer 21 peak power dropped 2.5% and 2.1% respectively, falling to £53.01/MWh and £45.4/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices held steady this week, averaging $43.01/bl. The markets remain uncertain over future demand for the commodity, with the fears of a second wave of coronavirus potentially limiting future growth in the oil contract. Minor losses were seen in Brent prices midweek following the decision by OPEC+ allies tease the productions cuts that started in May. The record 9.7mn bpd cuts will now be scaled back to 7.7mn bpd starting in August. Reports from OPEC saw the group envisaging global demand recovering by 7mn bpd in 2021, following the 9mn bpd drop this year as a result of the pandemic.		EU ETS carbon prices saw volatile movement this week, reaching a 14-year high of €30.57/t on 13 July, driven by supportive changes to weather and rallying European equity markets. Following this high, prices subsequently dropped throughout the week as a result of higher supply at EUA auctions. The increase the EUA’s issued helped prices crash by just over 10% to finish the week at €27.24/t. API 2 coal prices continued to rise this week, hitting a 4-month high of €60.40/t, drawing influence from the surge in EU ETS prices recently.
Wholesale price snapshot