Home » News » Wholesale Market Review » 18 September 2020

Energy Wholesale Market Review, 18 September 2020

Headlines

All gas contracts rose this week, supported by a rise in oil prices and an increase in gas-for-power demand, the latter owing to a significant reduction in wind speeds this week. October 20 gas was up 4.6% to 29.16p/th, and November 20 gas increased 1.3% to 35.47p/th. Seasonal gas contracts out to summer 22 lifted 1.5% on average, with the winter 20 contract up 1.5% to 37.50p/th. Similarly, most power contracts rose, owing to an underlying rise in gas and commodity markets. Near-term power contracts saw additional support from very low wind speeds and high continental power prices, which caused a surge in day-ahead and within-day prices mid-week. Seasonal power contracts increased 1.0% on average, with winter 20 and summer 21 prices expanding 1.2% and 2.7% respectively, to £51.00/MWh and £44.25/MWh. The EU ETS carbon price rebounded upwards this week, boosting 7.2% to average €29.23/t, as the European Commission moved forwards on setting more stringent 2030 climate targets. Brent crude oil similarly rose by 1.1% to average $41.27/bl, amid OPEC encouraging its members to stick with their production quotas despite low prices.

Baseload electricity
Day-ahead power rose 9.3% to £52.75/MWh, as periods of significantly lower wind generation this week created a bullish sentiment as temperatures once again decline. October 20 power climbed 1.7% to £42.90/MWh and November 20 power increased 2.7% to £53/MWh.		Q420 power moved 1.5% higher to £49.22/MWh. The annual October 20 contract rose 1.9% to £47.63/MWh, but was still 8.0% lower than the same time last year (£51.79/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 13.7% to £59.25/MWh, similar to its baseload counterpart, as day-light hours continue to draw in and bullish sentiment swept spot power prices this week. October 20 peak power gained 1.8% to £49.69/MWh, and November 20 peak power increased 4.0% to £63.28/MWh.		The annual October 20 peak power contract lost 2.3% to £54.37/MWh. This is 7.1% lower than the same time last year (58.5/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts boosted this week, up on average by 1.0%. Winter 20 and summer 21 expanded 1.2% and 2.7% respectively, rising to £51.00/MWh and £44.25/MWh.		Most Seasonal peak power contracts also rose this week, up 1.8% on average. Winter 20 and summer 21 peak power increased 2.7% and 1.7% respectively, up to £60.13/MWh and £48.61/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices rose marginally this week, seeing a 1.1% increase to average $41.27/bl— but dipping under $40/bl at the beginning of the week. The brent crude oil price gained support as OPEC encouraged its members to stick to their production quotas with some reports of a supply deficit. Demand concerns also continue to resonate through the market, with prices consequently struggling to gain momentum.		Following a decline last week, EU ETS prices rose 7.2% to average €29.23/t this week. The market experienced mixed movements but remained above €28.00 for the entirety of the week. The sustained positive sentiment in the market was surrounded by proposals of more ambitious 2030 climate targets for the EU.
Wholesale price snapshot