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Energy Wholesale Market Review, 18 October 2019

Headlines

The majority of power and gas contracts decreased this week. Day-ahead contracts were an exception with day-ahead gas jumping 21.7% to 28.0p/th, driven by rising demand amid colder temperatures and weaker wind generation. Day-ahead power lifted 2.9% to £42.2/MWh, with low levels of wind generation expected on Monday. November 2019 gas lost 1.6% to 41.7p/th and December 19 gas dropped 4.3% to 46.8p/th. Seasonal gas contracts fell 4.0% on average with summer 20 gas dropping 4.6% to 42.3p/th. Month-ahead power lifted 0.2% to £49.2/MWh and December 19 power lost 1.3% to £51.7/MWh. Seasonal power prices slipped 1.3% on average. Summer 20 power edged 0.8% lower to £47.3/MWh and the winter 20 contract decreased 1.1% to £54.2/MWh. Brent crude oil rose 0.7% to average $59.1/bl. Prices were pushed higher by news of shutdowns at the UK’s Buzzard oilfield and the Forties pipeline although gains were limited by concerns of slower economic growth in China and news that US crude inventories rose more than expected. EU ETS carbon jumped 8.6% to average €25.0/t, following the agreement of a Brexit deal between the EU and the UK. API 2 coal gained 1.4% to average $68.6/t.

Baseload electricity
Day-ahead power gained 2.9% to £42.2/MWh, following forecasts of low wind generation on Monday. Month-ahead power lifted 0.2% to £49.2/MWh, while December 19 power lost 1.3% to £51.7/MWh.		Q120 power slipped 1.2% to £54.1/MWh. The annual April 20 power contract declined 1.0% to end the week at £50.7/MWh. This is 5.0% lower than the same time last year (£53.4/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power fell 5.1% to £46.5/MWh, £4.3/MWh above its baseload counterpart. November 19 peak power rose 0.8% to £56.6/MWh. December 19 peak power decreased 1.1% to £58.2/MWh.		Annual April 20 peak power was 1.0% lower at £56.4/MWh, £5.7/MWh above its baseload power counterpart. The contract is 3.3% below its value this time last year (£58.3/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal baseload power contracts decreased, falling 1.3% on average. Summer 20 power slipped 0.8% to £47.3/MWh, while winter 20 decreased 1.1% to £54.2/MWh.		Seasonal peak power contracts were 1.0% lower on average. Summer 20 peak power fell 1.0% to £51.1/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil rose 0.7% to average $59.1/bl. Prices were pushed higher by news of shutdowns at the UK’s Buzzard oilfield and the Forties pipeline. However, gains were limited by concerns of slower economic growth in China and news that US crude inventories rose more than expected the previous week. API 2 coal prices gained 1.4% to average $68.6/t. Strikes at French nuclear, hydro and gas-fired power stations resulted in a loss of 4.7GW of generation capacity, providing opportunity for coal-fired generators to fill the gap.		EU ETS carbon jumped 8.6% to average €25.0/t. Prices were supported by the agreement of a Brexit deal between the EU and the UK. However, some uncertainty remains with the deal still requiring approval by both the UK and EU parliaments.
Wholesale price snaphot