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Energy Wholesale Market Review, 28 February 2020

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Most power and gas contracts decreased this week, reflecting the movements of the global economy, with the day-ahead contracts as the exceptions. Day-ahead gas rose 6.2% to 24.00p/th, as forecasts of a drop in temperatures saw a rise in expected gas demand. Day-ahead power followed gas and rose 6.8% to £35.15/MWh as forecasts of lower wind generation extended gains. March 20 gas was down 7.3% at 20.85p/th, and April 20 gas decreased 3.3% to 21.11p/th. All seasonal gas contracts declined this week, down by 5.8% on average. Summer 20 and winter 20 gas dropped 6.0% and 5.9% respectively, subsiding to 22.00p/th and 34.38p/th. All seasonal power contracts declined this week, down on average by 4.0%, as summer 20 power decreased 4.7% to £32.75/MWh, while winter 20 power fell 4.4% to £42.15/MWh. Brent crude oil fell 6.5% to average $53.93/bl as prices recorded their largest weekly fall in over 4 years, dropping 10.6% from Monday to Friday. EU ETS carbon lost 3.7% to average €24.04/t this week as prices lost the recent momentum seen in recent weeks, ending the week at €23.33/t. API 2 coal saw further losses this week, falling 3.6% to average $57.19/t.

Baseload electricity
Day-ahead power rose 6.8% to £35.15/MWh with forecasts of lower wind generation and colder weather supporting prices. March 20 power climbed 1.1% to £33.50/MWh and April 20 power decreased 3.6% to £32.20/MWh.		Q220 power moved 4.6% lower to £32.50/MWh. The Annual April 20 contract lost 4.5% to £37.45/MWh, 27.7% lower than the same time last year (£51.82/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 6.1% to £38.00/MWh following its baseload counterpart higher. March 20 peak power declined 0.4% to £37.35/MWh, and April 20 peak power decreased 3.3% to £35.19/MWh.		The Annual April 20 peak power lost 5.0% to £42.71/MWh. This is 26.6% lower than the same time last year (£58.17/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts declined this week, down on average by 4.0%. Summer 20 power decreased 4.7% to £32.75/MWh, while winter 20 fell 4.4% to £42.15/MWh.		All seasonal peak power contracts declined this week, down £4.7% on average. Summer 20 and winter 20 peak power dropped 5.1% and 4.9% respectively, falling to £36.65/MWh and £48.77/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil fell 6.5% to average $53.93/bl as oil prices recorded their largest weekly fall in over 4 years, dropping 10.6% from Monday to Friday. Market focus shifted from the drop in Libyan output – which saw prices lift last week, back to the increasing spread of the coronavirus outside of China. With the virus having spread to a now estimated 47 countries, there are increasing market concerns over the damage this may do to the future of global oil consumption growth, particularly in large consuming countries such as the US. API 2 coal saw further losses this week, falling by 3.6% to average $57.19/t. Coal prices dropped after another turbulent week for the global economy.		EU ETS carbon lost 3.7% to average €24.04/t this week as prices lost the recent momentum seen in recent weeks, ending the week at €23.33/t. Following Brent crude oil, API 2 coal prices and the wider global economy down, further pressure was added to EU ETS prices on the announcement that UK auctions for the ETS would resume on 4 March.
Wholesale price snapshot