Energy Wholesale Market Review, 23 April 2021

Headlines

It was a mixed week in terms of pricing fundamentals across gas and power markets this week, with majority of baseload power contracts rising, with the opposite said for gas contracts. Day-ahead gas fell 1.7% to 55.80p/th, following periods of system oversupply, strong LNG sendout and warmer weather. Conversely, day-ahead power rose 2.3% to £67/MWh, supported by periods of increased demand and reductions in available nuclear capacity at the weeks start. May 21 gas was up 0.6% at 52.26p/th, and June 21 gas increased 1.5% to 53.15p/th. All seasonal gas contracts declined this week, down by 0.9% on average, while both winter 21 and summer 22 gas dropped 0.5% and 0.8% respectively, subsiding to 59.32p/th and 43.18p/th. Most seasonal power contracts rose this week, up on average by 0.6%, as winter 21 and summer 22 expanded 1.8% and 0.8% respectively, rising to £71.00/MWh and £52.90/MWh. Brent crude oil prices saw gains, rising 1.7% to average $66.17/bl. At the weeks start, prices were supported by a generally weakening dollar, combined with disruption to Libyan oil exports, alongside an unexpected decline in US crude inventories throughout the week. EU ETS carbon prices rose this week, rising 2.7% to average €45.43/t. Prices broke all-time record highs on more than one occasion but reached its highest peak of €46.70/t on 22 April.

Baseload electricity
  • Day-ahead power rose 2.3% to £67/MWh, supported by periods of increased demand and reductions in available nuclear capacity at the weeks start.
  • May 21 power climbed 2.4% at £62.89/MWh and June 21 power increased 2.4% to £64/MWh.
  • Q321 power moved 1.2% higher to £63/MWh.
  • The annual October 21 contract rose 1.3% to £61.95/MWh, 49.6% higher than the same time last year (£41.42/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 23 April 2021

Annual April Contract

Baseload electricity Annual April contract 23 April 2021

Peak electricity
  • Day-ahead peak power was up 11.5% to £71.75/MWh, following its baseload counterpart higher.
  • May 21 peak power gained 6.3% at £68.5/MWh, and June 21 peak power increased 4.0% to £69.25/MWh.
  • The annual October 21 peak power lost 9.3% to £61.88/MWh.
  • This is 30.3% lower than the same time last year (47.5/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 23 April 2021

Annual April contract

Peak electricity Annual April contract 23 April 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 23 April 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 23 April 2021

  • Most seasonal power contracts lifted this week, up on average by 0.6%.
  • Winter 21 and summer 22 expanded 1.8% and 0.8% respectively, rising to £71.00/MWh and £52.90/MWh.
  • All seasonal peak power contracts declined this week, down 9.9% on average.
  • Winter 21 and summer 22 peak power dropped 11.0% and 7.0% respectively, falling to £70.50/MWh and £53.25/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Coal 23 April 2021

Carbon

Commodity price movements Carbon 23 April 2021

  • Brent crude oil prices rose this week, up 1.7% to average $66.17/bl.
  • A combination of factors contributed to more bullish price movements this week, in continuation of recent upwards trends observed in recent weeks.
  • At the weeks start, prices were supported by a generally weakening dollar, combined with disruption to Libyan oil exports alongside unexpected decline in US crude inventories throughout the week.
  • Gains made at the weeks start were partially offset by reports of increases in COVID-19 case numbers in many consuming countries such as India and Japan.
  • EU ETS carbon prices rose this week, rising 2.7% to average €45.43/t. Prices broke all-time record highs on more than one occasion but reached its highest peak of €46.70/t on 22 April.
  • Recent cooler weather across much of Europe has supported EU ETS prices again this week. Periods of cold weather has increased fossil fuel demand, feeding through into higher EUA demand.
  • Added support came from speculative buying and last-minute compliance demand, along with negotiators agreeing upon the EU’s overall 2030 emissions target.
Wholesale price snapshot 

Wholesale price snapshot 23 April 2021

Posted by TEAM on 26 April 2021
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