Energy Wholesale Market Review, 19 March 2021

Headlines

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

Baseload electricity Forward curve comparison 19 March 2021

Annual April Contract

Baseload electricity Annual April contract 19 March 2021

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

Peak electricity Forward curve comparison 19 March 2021

Annual April contract

Peak electricity Annual April contract 19 March 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 19 March 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 19 March 2021

  • 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

Commodity price movements Oil and coal 19 March 2021

Carbon

Commodity price movements Carbon 19 March 2021

  • 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 

Wholesale price snapshot 19 March 2021

Posted by TEAM on 22 March 2021
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