Energy Wholesale Market Review, 20 May 2022

Headlines

The majority of gas and power contracts decreased this week. The day-ahead contracts were an exception with day-ahead gas jumping 96.0% to 98.00p/th. Day-ahead gas was supported early in the week by lower levels of LNG send-out and restricted Norwegian supply as a result of maintenance. Month-ahead gas lifted 2.3% to 158.55p/th while the July contract slipped 3.0% to 176.48p/th. Seasonal gas contracts lost 8.9% on average. Winter 22 gas fell 7.0% to 234.70p/th and summer 23 gas dropped 9.8% to 165.05p/th. Day-ahead power gained 50.0% to £135.00/MWh, supported by higher gas prices and forecasts of low wind generation on Monday. June 22 power lost 2.8% to £166.16/MWh and July 22 power declined 4.2% to £181.06/MWh. Seasonal power contracts dropped 4.2% on average. Winter 22 power fell 3.9% to £235.75/MWh while the summer 23 contract lost 5.0% to £161.50/MWh. Brent crude oil climbed 4.7% to average $111.91/bl, driven higher by the prospect of an EU embargo on Russian oil. EU ETS carbon lost 1.5% to average €86.88/t, weighed on by weak auction results and an EU proposal to sell more than 200mn EUAs from the Market Stability Reserve. Meanwhile, UK ETS carbon fell 3.3% to average £83.75/t.

Baseload electricity
  • Day-ahead power jumped 50.0% to £135.00/MWh, supported by higher gas prices and forecasts of low wind generation on Monday.
  • June 22 power lost 2.8% to £166.16/MWh and July 22 power decreased 4.2% to £181.06/MWh.
  • Q322 power slipped 1.8% to £204.56/MWh.
  • The annual October 22 contract lost 4.3% to £198.63/MWh, but was 220.7% higher than the same time last year (£61.93/MWh).
Forward Curve Comparison

 

Annual April Contract

Peak electricity
  • Day-ahead peak power climbed 31.8% to £145.00/MWh.
  • June 22 peak power fell 7.8% to £178.05/MWh, and July 22 peak power dropped 8.6% to £195.00/MWh.
  • The annual October 22 peak power contract lost 6.9% to £241.63/MWh.
  • This is 243.6% higher than the same time last year (£70.33/MWh).

Forward curve comparison

 

Annual April contract

 

Seasonal power prices

Seasonal baseload power contracts

 

 

Seasonal baseload power curve

 

 

  • Seasonal power contracts dropped 4.2% on average this week.
  • Winter 22 power fell 3.9% to £235.75/MWh while the summer 23 contract lost 5.0% to £161.50/MWh.
  • Seasonal peak power contracts lost 5.0% on average, this week.
  • Winter 22 peak power dropped 7.1% to £297.00/MWh and summer 23 peak power fell 6.5% to £232.45/MWh.
Commodity price movements
 

Oil and Coal

 

Carbon

  • Brent crude oil climbed 4.7% to average $111.91/bl, this week.
  • Prices were predominantly driven higher by the prospect of an EU embargo on Russian oil.
  • In contrast, concerns over slowing economic growth provided some downward pressure on prices towards the end of the week.
  • EU ETS carbon lost 1.5% to average €86.88/t, weighed on by weak auction results and an EU proposal to sell more than 200mn EUAs from the Market Stability Reserve.
  • In addition, EEX announced that 2022 EUA auction volumes will be reduced by around 3%, citing a previous calculation error.
  • Meanwhile, UK ETS carbon fell 3.3% to average £83.75/t.
Wholesale price snapshot 

 

Posted by TEAM on 23 May 2022