Energy Wholesale Market Review, 24 July 2020

Headlines

Most power and gas contracts moved lower this week, with a few short-term contracts as exceptions. Day-ahead gas rose 0.4% to 13.3p/th as gas imports saw a slight decrease as a result of maintenance on the Nord Stream pipeline. The majority of power contracts decreased this week, although the day-ahead power contract rose 0.8% to £31.5/MWh on forecasts of lower wind generation. August 20 power slipped 0.3% at £30.4/MWh, and September 20 power decreased 1.0% to £32.9/MWh. Seasonal gas contracts declined by 4.0% on average this week, with winter 20 and summer 21 gas dropping 4.9% and 6.9% to 31.9p/th and 29.2p/th, respectively. All seasonal power contracts declined this week, down on average by 2.6%, as winter 20 power decreased 2.8% to £44.55/MWh and summer 21 fell 4.0% to £39.75/MWh. Brent crude oil prices rose by 2.0% this week, averaging $43.87/bl. Oil prices turned bullish on the news that researchers at Oxford University had made positive steps in COVID-19 vaccine trials. Following the EU ETS price hitting a 14-year high the previous week, prices moved 7.8% lower to average €26.93/t as a result of supply-side pressure early in the week.

Baseload electricity
  • Day-ahead power rose 0.8% to £31.5/MWh following lower wind generation forecasts.
  • August 20 power slipped 0.3% to £30.4/MWh and September 20 power decreased 1.0% to £32.9/MWh.
  • Q420 power moved 3.5% lower to £41.8/MWh.
  • The annual October 20 contract lost 3.3% to £42.15/MWh, 20.0% lower than the same time last year (£52.66/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 24 July 2020

Annual October Contract

Baseload electricity Annual October contract 24 July 2020

Peak electricity
  • Day-ahead peak power was down 3.8% at £31.75/MWh.
  • August 20 peak power declined 6.8% to £34.6/MWh, and September 20 peak power decreased 9.8% to £37.28/MWh.
  • The annual October 20 peak power contract lost 2.5% to £47.99/MWh.
  • This is 18.7% lower than the same time last year (59.04/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 17 July 2020

Annual October contract

Peak electricity October contract 17 July 2020

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 24 July 2020

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 24 July 2020

  • All seasonal power contracts declined this week, down on average by 2.6%.
  • Winter 20 power decreased 2.8% to £44.55/MWh, while summer 21 fell 4.0% to £39.75/MWh.
  • All seasonal peak power contracts declined this week, down 1.9% on average.
  • Winter 20 and summer 21 peak power dropped 1.8% and 3.3% respectively, falling to £52.07/MWh and £43.9/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Coal and Oil 24 July 2020

Carbon

Commodity price movements Carbon 24 July 2020

  • Brent crude oil prices rose by 2.0% this week, averaging $43.87/bl.
  • Oil prices turned bullish on the news that researchers at Oxford University had made positive steps in COVID-19 vaccine trials.
  • The news pushed the Brent price to more than a four-month high of $44.16/bl on 21 July.
  • Oil prices lost some momentum in the middle of the week, as high US jobless numbers and the news that congress may not agree on a US stimulus package negatively affected both the Brent and WTI price.
  • Prices closed the week marginally higher than they opened, supported by a weak US dollar but weighed upon by increasing US-China tensions.
  • API 2 coal prices rose by 1.3% this week to average $60.20/t, as demand for the commodity continues to increase following the easing of lockdown measures around the world.
  • Following the EU ETS price hitting a 14-year high the previous week, prices moved 7.8% lower to average €26.93/t as a result of supply-side pressure early in the week.
  • Prices lifted slightly midweek in reacting to new stimulus measures announced by European Central Bank.
Wholesale price snapshot

Wholesale price snapshot 24 July 2020

Posted by TEAM on 24 July 2020
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