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Energy Wholesale Market Review, 20 September 2021

Headlines

The bullish and unprecedented highs observed across wholesale markets continued again this week, with record highs seen across gas and power day-ahead markets. Day-ahead gas rose 15.7% to 160.50p/th, reaching an all-time high on 15 September at 187.50p/th, driven by higher gas-for-power demand and a backdrop of tighter gas markets with continuing maintenance works across the Norwegian Continentel Shelf, and low European gas storage volumes. Day-ahead power shared strong bullish trends seen in gas contracts, rising 93.0% to £330/MWh, also reaching an all-time high of £540/MWh on 13 September, driven by the continuation of low wind output across the week and tight system margins. October 21 gas was up 14.6% at 161.55p/th, and November 21 gas increased 14.4% to 166.50p/th. All seasonal gas contracts boosted this week, up by 5.1% on average, while both winter 21 and summer 22 gas increased 14.4% and 4.0% respectively, lifting to 164.58p/th and 82.76p/th. All seasonal power contracts boosted this week, up on average by 6.2%, as winter 21 and summer 22 climbed 19.6% and 4.7%, rising to £165.00/MWh and £90.00/MWh respectively.

Baseload electricity
Day-ahead power rose 93.0% to £330/MWh, following the continuation of lower wind output in the week and simultaneous tighter system margins. October 21 power climbed 23.1% at £165/MWh and November 21 power increased 21.0% to £173/MWh.		Q421 power moved 21.8% higher to £169.9/MWh. The annual October 21 contract rose 13.8% to £127.5/MWh, 166.5% higher than the same time last year (£47.85/MWh).
Forward Curve Comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 94.6% to £395.00/MWh, following its baseload counterpart higher. October 21 peak power gained 61.3% at £225/MWh, and November 21 peak power increased 19.3% to £197.09/MWh.		The annual October 21 peak power rose 12.4% to £145.5/MWh. This is 169.6% higher than the same time last year (53.97/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts boosted this week, up on average by 6.2%. Winter 21 and summer 22 climbed 19.6% and 4.7% respectively, rising to £165.00/MWh and £90.00/MWh.		All seasonal peak power contracts rose this week, up 8.8% on average. Winter 21 and summer 22 peak power increased 18.0% and 3.1% respectively, rising to £190.00/MWh and £100.99/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude prices rebounded 3.3% to $74.51/bl this week, maintaining a strong price point in comparison to a year prior. Prices are now over 80% higher than the same time a year ago. It was a largely bullish week for the Brent crude market, with minimal downside. Prices gained support from multiple drivers, the first of which was lowering US crude stock volumes in the US, supporting a tighter supply picture.		The UK ETS fell 0.1% to average £53.70/t this week. The EU ETS also saw losses, down 3.4% to average €60.31/t. The return of higher auction volumes as we progress through September has seen prices begin to retreat slightly this week. Stronger wind generation expected will ease the demand for fossil fuel generation, dampening prices as a result.
Wholesale price snapshot