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Energy Wholesale Market Review, 21 May 2021

Headlines

All gas and power contracts recorded losses this week. Day-ahead power was down 10.7% to end the week at £73.25/MWh, amid stronger wind output, but remains unseasonably high with strong demand and high gas prices lending support. All seasonal power contracts declined last week, down on average by 3.6%. Winter 21 power decreased 3.9% to £81.20/MWh, while summer 22 fell 4.8% to £59.50/MWh. Day-ahead gas fell 0.4% to 66.00p/th, with prices remaining high amid unusually cold weather and high carbon prices. Month-ahead gas lost 7.1% to 63.39p/th. Seasonal gas contracts mirrored their power counterparts, declining by 3.9% on average. Both winter 21 and summer 22 gas dropped 6.4% and 7.0% respectively, subsiding to 69.07p/th and 48.00p/th. Brent crude oil fell 0.5% to average $67.82/bl. Economic reopening in Europe and the US was countered by demand concerns over surging COVID-19 cases in Asia and expectations that sanctions on Iranian oil exports will be lifted. EU ETS carbon lost 0.6% to average €53.23/t, after some profit-taking this week. UK ETS carbon ended its first week of trading to average £47.87/t, outturning £2.12/t higher on average against the equivalent EU ETS price.

Baseload electricity
Day-ahead power down 10.7% to £73.25/MWh, amid stronger wind output throughout the week. However, prices remained unseasonably high due to strong demand and high gas prices providing support. June 21 power slipped 3.0% to £75.50/MWh and July 21 power dropped 5.4% to £74.75/MWh.		Q321 power moved 2.5% lower to £74.99/MWh. The annual October 21 contract lost 4.3% to £70.35/MWh, which was 65.2% higher than the same time last year (£42.58/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power eased 13.1% to £76.15/MWh, following downward price movements from its baseload counterpart. June 21 peak power declined 0.5% at £80.35/MWh. Alternatively, July 21 peak power rose 2.6% to £79.00/MWh.		The annual October 21 peak power contract lost 6.4% to £78.20/MWh. This was 60.8% higher than the same time last year (£48.63/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts declined this week, down on average by 6.9%. Winter 21 and summer 22 fell 3.9% and 4.8% respectively, down to £81.20/MWh and £59.50/MWh.		The majority of seasonal peak power contracts saw gains this week, rising by 3.0% on average. Winter 21 and summer 22 peak power increased 5.1% and 8.3% respectively, to outturn at £91.70/MWh and £64.70/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil fell 0.5% to average $67.82/bl across the week. Economic reopening in Europe and the US was countered by demand concerns over surging COVID-19 cases in Asia and expectations that sanctions on Iranian oil exports will be lifted. Additional pressure came from news that the Energy Information Administration reported a US crude oil inventory build of 1.3 million barrels for the week to May 14. This was notably higher than earlier estimates which had forecast a 620,000 barrel increase for the same period.		EU ETS carbon lost 0.6% to average €53.23/t, after some profit-taking this week, moving away from the highs observed in previous weeks. EUA prices took a drive mid-week due to high auctions volumes, leading to oversupplied auctions. More generally, prices eased as market participants remained wary of increased speculative profit taking. UK ETS carbon ended its first week of trading to average £47.87/t, outturning £2.12/t higher on average against the equivalent EU ETS price.
Wholesale price snapshot