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Energy Wholesale Market Review, 27 November 2020

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All power contracts rose this week, supported by periods of notably low wind generation midweek, leading to tight supply margins. Higher gas prices also fed into power markets for much of the week. As a result, day-ahead power rose 14.8% to £51.1/MWh. In parallel, day-ahead gas rose 19.7% to 41.40p/th, supported by generally declining temperatures for much of the week, with temperatures projected to fall further still into next week. Consequently, December 20 gas was up 10.5% to 41.10p/th, and January 21 gas increased 9.0% to 41.67p/th. Similarly, all seasonal gas contracts increased this week, up by 2.6% on average. Summer 21 and winter 21 gas increased 5.0% and 3.7% respectively, lifting to 33.20p/th and 42.00p/th. Brent crude oil climbed for the third consecutive week, lifting a further 7.3% from the week prior to average $47.28/bl, reaching an eight-month high of $48.11/bl on 25 November. Oil prices continued to rally on ongoing COVID-19 vaccination developments, easing market uncertainty which has generally acted to dampen Brent crude prices in weeks prior. Further support was leant to prices during the week from OPEC and allies including Russia looking to extend the duration of their production cuts when they meet next week, to offset weak demand over the winter months. EU ETS carbon climbed for the third consecutive week, rising 2.5% to average €27.65/t this week. Prices reached a two-month high of €27.79/t on 26 November, supported by strong auction results.

Baseload electricity
Day-ahead power rose 14.8% to £51.1/MWh, following periods of notably low wind output mid-week. December 20 power climbed 12.6% to £49.0/MWh and January 21 power increased 10.4% to £52.9/MWh.		Q121 power moved 8.8% higher to £50.6/MWh. The annual April 21 contract rose 4.3% to £46.85/MWh, 2.8% lower than the same time last year (£48.19/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power was up 33.3% to £65.00/MWh, following its baseload counterpart higher. December 20 peak power gained 9.3% to £56.16/MWh, and January 21 peak power increased 10.1% to £60.8/MWh.		The annual April 21 peak power contract lost 2.9% to £52.12/MWh. This is 4.2% lower than the same time last year (54.38/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts boosted this week, up on average by 3.6%. Summer 21 and winter 21 power expanded 5.3% and 3.3% respectively, rising to £43.59/MWh and £50.11/MWh.		All seasonal peak power contracts rose this week, up 2.2% on average. Summer 21 and winter 21 peak power increased 3.5% and 2.3% to £47.48/MWh and £56.75/MWh, respectively.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil climbed for the third consecutive week, lifting a further 7.3% from the week prior to average $47.28/bl, reaching an eight-month high of $48.11/bl on 25 November. Oil prices continued to rally on ongoing COVID-19 vaccination developments, easing market uncertainty which has generally acted to dampen Brent crude prices in week prior. Further support was leant to prices during the week from OPEC and allies including Russia looking to extend the duration of their production cuts when they meet next week, to offset weak demand over the winter months. API 2 coal gained 3.6% from the previous week to average $58.25/t.		EU ETS carbon climbed for the third consecutive week, rising 2.5% to average €27.65/t this week. Prices reached a two-month high of €27.79/t on 26 November, supported by strong auction results. Carbon prices like many commodity markets continued to find support from positive COVID-19 vaccination developments. The likelihood of reduced auction supply in December and a one-month delay in the start of 2021 auctions also acted to lift prices higher this week.
Wholesale price snapshot