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Energy Wholesale Market Review, 21 February 2020

Headlines

Most power and gas contracts rose this week as the UK domestic market reversed losses seen last week. Day-ahead gas rose 9.7% to 22.60p/th although an influx of LNG did see prices ease towards the end of the week. Day-ahead power rose 25.8% to £32.90/MWh, recovering from record lows to follow other markets higher this week. March 20 gas was up 9.0% at 22.50p/th and April 20 gas increased 5.4% to 21.84p/th. Seasonal gas contracts were mixed this week, but ultimately moved down 0.1% on average. Summer 20 gas increased 1.9% to 23.41p/th, while winter 20 gas dropped 0.4% to 36.54p/th. All seasonal power contracts boosted this week, up on average by 1.9%, as summer 20 and winter 20 lifted 2.5% and 0.3% respectively, rising to £34.36/MWh and £44.07/MWh. Brent crude oil rose 4.9% to $57.68/bl marking the first weekly increase of the commodity since early January, though prices dropped on Friday. EU ETS carbon gained 5.9% to €24.98/t to continue recent momentum with fewer EUAs auctioned this week. API 2 coal lost by 0.4% to $59.62/t with prices fluctuating this week on uncertainty of demand in China and increasing output from renewable sources (largely wind).

Baseload electricity
Day-ahead power rose 25.8% to £32.90/MWh to recover from record-low’s last week. March 20 power climbed 4.0% to £33.15/MWh and April 20 power increased 4.0% to £33.40/MWh.		Q220 power moved 2.7% higher to £34.05/MWh. The Annual April 20 contract rose 1.3% to £39.22/MWh, 23.2% lower than the same time last year (£51.08/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 3.2% to £35.80/MWh, £2.90/MWh above its baseload counterpart. March 20 peak power gained 4.7% to £37.49/MWh, and April 20 peak power increased 2.7% to £44.95/MWh.		The Annual April 20 peak power contract lost 2.7% to 44.95/MWh. This is 21.8% lower than the same time last year (57.46/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 1.9%. Summer 20 and winter 20 gained 2.5% and 0.3% respectively, rising to £34.36/MWh and £44.07/MWh.		All seasonal peak power contracts rose this week, up £2.9% on average. Summer 20 and winter 20 peak power increased 3.7% and 1.9% respectively, falling to £38.63/MWh and £51.27/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil rose 4.9% to average $57.68/bl, marking the first weekly increase of the commodity since early January, though prices dropped on Friday. Market fears over the impact of the coronavirus on Brent prices have eased in recent days, with the number of fresh cases of the virus reported daily decreasing. A lower than inspected rise in US crude inventories helped to lift prices this week. Focus also increased on weakened output from Libya, which dropped to an estimated 122,000 bpd. API 2 coal saw small losses this week, falling to average $59.62/t. Coal prices fluctuated this week on uncertainty of demand in China and increasing output from renewable sources (largely wind).		EU ETS carbon increased 5.9% to average €24.98/t to continue recent momentum. Fewer EU auctions this week and a general rise in other markets lifted EU ETS prices to a near 2-month high of €25.72/t on 20 February. The high share of renewable generation in the generation mix due to high wind has pressed on prices in recent weeks.
Wholesale price snapshot