26 April 2019

Headlines

Wholesale power and gas contracts experienced mixed movements week-on-week. All near-term wholesale power and gas contracts fell, amid comfortable gas supplies and above seasonal normal temperatures. Contracts further along the curve were supported by a further recovery in Brent crude oil, which went above $75/bl for the first time in five months. All near-term baseload power contracts fell week-on-week, following their gas counterparts lower, despite another weekly rise in EU ETS carbon prices. Day-ahead power slipped 0.6% to end the week at £44.0/MWh. Seasonal power contracts experienced mixed movements, rising 0.4% on average. All near-term gas contracts fell this week, pressured by above seasonal normal temperatures and comfortable gas supplies. Week-on-week, day-ahead gas dropped 4.3% to 33.8p/th. The contract started the week at 27.0p/th, a two-year low as the gas system was oversupplied after Easter weekend. Nearly all seasonal contracts rose week-on-week, up 0.3% on average, following oil prices higher. Brent crude oil prices rose 4.0% to average $74.3/bl, its seventh consecutive weekly increase. API 2 coal prices fell 2.7% to average $72.7/t this week, pressured by weak demand and high coal stocks at key ARA terminals. Average EU ETS carbon prices were slightly higher at €27.1/t this week. Prices were supported by the upcoming compliance deadline on 30 April.

Baseload electricity
  • Day-ahead power slipped 0.6% to end the week at £44.0/MWh, despite forecasts of low wind output.
  • May and June 19 power were down 3.2% and 2.7% to £43.2/MWh and £44.1/MWh respectively.
  • Annual October 19 power decreased slightly, down 0.3% week-on-week to £55.6/MWh.
  • The contract is 12.1% above the same time last month (£49.6/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 26 April 2019

Annual April Contract

Baseload electricity Annual October contract 26 April 2019

Peak electricity
  • Day-ahead peak power rose 0.5% to £46.5/MWh, £2.5/MWh above its baseload counterpart.
  • Day-ahead peak power is 26.4% lower than the same time last year when it was £63.2/MWh.
  • May and June 19 peak power fell 3.2% and 2.4% to £46.1/MWh and £48.6/MWh, respectively.
  • Annual October 19 peak power was unchanged at £61.3/MWh, £5.7/MWh above its baseload power counterpart.
  • The contract is 11.1% higher than its value this time last month (£55.1/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 26 April 2019

Annual April contract

Peak electricity Annual October contract 26 April 2019

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 26 April 2019

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 26 April 2019

 

  • Seasonal power contracts experienced mixed movements, rising 0.4% on average.
  • Winter 19 and summer 21 power fell, down 0.7% and 0.4% at £60.0/MWh and £48.9/MWh respectively.
  • Seasonal peak power contracts rose 0.6% on average, with only winter 19 falling, down 0.2% to £67.1/MWh.
  • Summer and winter 20 peak contracts were up 0.3% and 1.2% at £55.4/MWh and £66.2/MWh.
Commodity price movements

Oil and Coal 

Commodity price movements Oil and Coal 26 April 2019

Carbon

Commodity price movements Carbon 26 April 2019

    • Brent crude oil prices rose 4.0% to average $74.3/bl, its seventh consecutive weekly increase.
    • Prices rose to a fresh five-month high above $75.0/bl early in the week following news that the US government would end all Iranian sanction waivers by the end of May, causing concerns of a tighter market.
    • However, prices dropped back below $73.0/bl on 26 April on reports that OPEC+ is likely to end current production cuts after June.
    • API 2 coal prices fell 2.7% to average $72.7/t this week, pressured by weak demand and high coal stocks at key ARA terminals.
    • According to government data published on 25 April, UK coal imports in February were down 14% y-o-y, at 694,000t following a decline in coal-fired generation.
  • Average EU ETS carbon prices were slightly higher at €27.1/t this week.
  • Prices were again supported by lower auction volumes following the Easter Monday holiday, with the upcoming compliance deadline on 30 April also encouraging some last-minute buying.
  • However, traders continue to be cautious as cheap gas prices provide downside risk and encourage coal to gas switching, therefore lowering demand for EUA buying.
Wholesale price snapshot

Wholesale price snapshot 26 April 2019

Posted by TEAM on 26 April 2019
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