Energy Wholesale Market Review, 19 February 2021

Headlines

It has been a largely bearish week for gas and power contracts this week, with some exceptions on longer term seasonal power contracts. Day-ahead gas fell 4.9% to 43.75p/th, following the subsidence of Storm Darcy and the associated cold weather front, leaving much warmer temperatures across much of the UK, reducing gas demand. Day-ahead power rose 0.2% to £57.5/MWh, despite the warmer temperatures but supported by forecasts of notable declines in wind generation next week. March 21 gas was down 2.0% at 43.73p/th, and April 21 gas decreased 0.6% to 42.84p/th. All seasonal gas contracts declined this week, down by 0.8% on average, as summer 21 and winter 21 gas dropped 0.8% and 0.3% respectively, subsiding to 41.14p/th and 50.47p/th. Most seasonal power contracts declined this week, down on average by 0.6%. Summer 21 power decreased 1.1% to £51.87/MWh, while winter 21 lifted 0.3% to £59.76/MWh. Brent crude oil rose 4.7% to $63.65/bl this week. Brent crude broke 12-month highs again this week across multiple days. Prices across 15 and 16 February reached $63.26/bl. Prices broke their yearly high again on 17 February rising to $63.99/bl before climbing even higher to its years and weekly high of $64.47/bl on 18 February. EU ETS carbon prices grew this week, rising 1.4% to average €39.07/t. Prices achieved an all-time high again this week, reaching €40.21 on 16 February.

Baseload electricity
  • Day-ahead power rose 0.2% to £57.5/MWh, weighed by warmer temperatures but ultimately benefitting from forecasts of reduce wind generation forecast next week.
  • March 21 power slipped 1.2% to £54.71/MWh and April 21 power decreased 0.9% to £54.25/MWh.
  • Q221 power moved 3.0% lower to £52.15/MWh.
  • The annual April 21 contract lost 0.4% to £55.82/MWh, 28.0% higher than the same time last year (£43.6/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 19 February 2021

Annual April Contract

Baseload electricity Annual April contract 19 February 2021

Peak electricity
  • Comparing Friday on Friday price movements, day-ahead peak power remained static at £63.50/MWh.
  • March 21 peak power declined 2.2% to £60.73/MWh, and April 21 peak power decreased 3.6% to £56.64/MWh.
  • The annual April 21 peak power contract lost 1.1% to £62.36/MWh.
  • This is 24.7% lower than the same time last year (50.01/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 19 February 2021

 

Annual April contract

Peak electricity Annual April contract 19 February 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 19 February 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 19 February 2021

  • Most seasonal power contracts declined this week, down on average by 0.6%.
  • Summer 21 power decreased 1.1% to £51.87/MWh, while winter 21 expanded 0.3% to £59.76/MWh.
  • All seasonal peak power contracts declined this week, down 1.3% on average.
  • Summer 21 and winter 21 peak power dropped 1.8% and 0.6% respectively, falling to £56.03/MWh and £68.68/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 19 February 2021

Carbon

Commodity price movements Carbon 19 February 2021

  • Brent crude oil rose 4.7% to $63.65/bl this week.
  • Brent crude broke 12-month highs again this week across multiple days. Prices across 15 and 16 February reached $63.26/bl. Prices broke their yearly high again on 17 February rising to $63.99/bl before climbing even higher to its years and weekly high of $64.47/bl on 18 February.
  • Prices also gained support from supply disruption and supported by concerns that the winter storm in Texas will disrupt U.S output for days or even weeks.
  • API 2 coal fell 3.6% from the previous week to average $64.78/t.
  • EU ETS carbon prices grew this week, rising 1.4% to average €39.07/t. Prices achieved an all-time high again this week, reaching €40.21 on 16 February.
  • Carbon markets continue to prosper on investor speculation as well as drawing on some of the records gains made in the Brent crude market this week.
  • Carbon prices also remain buoyant from more and continued ambitious EU climate targets and policy, as well as a potential supply squeeze on upcoming EUA phase 3.
Wholesale price snapshot 

Wholesale price snapshot 19 February 2021

Posted by TEAM on 22 February 2021
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