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Energy Wholesale Market Review, 19 March 2021

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It was a largely bearish week for gas and power markets this week. Day-ahead gas fell 6.4% to 43.80p/th, as the system ended the week oversupplied amid high levels of LNG send-out, while Asian LNG prices also fell. Similarly, day-ahead power fell 5.1% to £63.58/MWh, following gas prices lower and forecasts of higher wind output early next week. April 21 gas was down 5.3% at 43.57p/th, and May 21 gas decreased 3.8% to 41.73p/th. All seasonal gas contracts declined this week, down by 2.4% on average. Both summer 21 and winter 21 gas dropped, by 3.9% and 1.8% respectively, to 42.35p/th and 52.66p/th. Most seasonal power contracts also declined this week, down on average by 0.6%. Summer 21 power slid 2.3% to £54.50/MWh, while winter 21 fell 0.7% to £64.32/MWh. Brent crude oil prices dropped 2.1% to average $67.39/bl this week. Prices were weighed upon by news select countries in Europe were opting to delay continued vaccination roll-outs. Consequently, with cases still rising in these countries, threats of further nationwide lockdowns have prompted demand concerns for the market. EU ETS carbon prices rose this week, rising 4.4% to average €42.55/t. EU ETS prices reached a new all-time high on 18 March, up to €43.63/t.

Baseload electricity
Day-ahead power fell 5.1% to £63.58/MWh, following gas prices lower on the near curve, compounded by forecasts of strong wind generation at the start of next week. April 21 power slipped 2.5% to £55.5/MWh and May 21 power decreased 3.6% to £53.6/MWh.		Q221 power moved 1.9% lower to £55.09/MWh. The annual April 21 contract lost 1.5% to £59.41/MWh, 48.5% higher than the same time last year (£40.01/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power was down 23.1% to £61.50/MWh following its baseload counterpart lower. April 21 peak power declined 3.6% at £59.3/MWh, and May 21 peak power decreased 3.6% to £57.38/MWh.		The annual April 21 peak power lost 2.0% to £66.84/MWh. This is 47.6% lower than the same time last year (45.27/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts declined this week, down on average by 0.6%. Summer 21 power decreased 2.3% to £54.50/MWh, while winter 21 fell 0.7% to £64.32/MWh.		All seasonal peak power contracts declined this week, down 1.7% on average. Summer 21 and winter 21 peak power dropped 3.3% and 0.9% respectively, falling to £59.12/MWh and £74.56/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices slipped this week, down 2.1% to average $67.39/bl. Despite continued optimism in the market, prices were weighed upon this week by news select countries in Europe were opting to delay continued vaccination roll-outs, amid concerns of side-effects from the Oxford AstraZeneca vaccine. Consequently, with cases still rising in these countries, threats of further nationwide lockdowns have prompted demand concerns for the market. Meanwhile, API 2 coal rose 1.4% from the previous week to average $69.27/t.		EU ETS carbon prices rose this week, rising 4.4% to average €42.55/t. Prices reached a new all-time high on 18 March, up to €43.63/t. Prices found support from increased demand from compliance buyers and record numbers of speculative trading. A buoyant Brent crude market and forecasts of cooler forecast temperatures expected in Europe next week have also fuelled carbon price rises.
Wholesale price snapshot