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Energy Wholesale Market Review, 28 May 2021

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It was a largely bearish week for most tracked gas and power contracts this week, with some exceptions in the longer dated seasonal contracts. In support of these bearish movements, day-ahead power fell 0.3% to £73.00/MWh, afflicted by warmer temperatures as the week matured combined with wavering demand and lowering gas prices feeding through on the near curve. June 21 gas was down 4.4% at 60.57p/th, and July 21 gas decreased 2.3% to 60.38p/th. All seasonal gas contracts declined this week, down by 2.5% on average. Winter 21 and summer 22 gas dropped 1.0% and 2.3% to 68.36p/th and 46.90p/th, respectively. Most seasonal power contracts decreased this week, down on average by 1.0%, as winter 21 power slipped 0.2% to £81.00/MWh, while summer 22 fell 1.9% to £58.35/MWh. Brent crude oil edged 1.0% higher to average $68.52/bl. The most notable driving force for bullish Brent crude prices this week was the on-going negotiations around a nuclear deal between the US and Iran. News circulated that such discussions were not operating as smoothly as first thought which fed into some uncertainty about the deal going ahead, lending support to prices. EU ETS carbon prices remained high, but lost 1.1% to average €52.65/t. Similar to its European counterpart, UK ETS fell this week, down 1% from the week prior to reach £50.17/t.

Baseload electricity
Day-ahead power fell 0.3% to £73.00/MWh, following warmer temperatures as the week matured and losses across gas contracts on the near curve. June 21 power slipped 2.5% to £73.60/MWh and July 21 power decreased 2.0% to £73.25/MWh.		Q321 power moved 1.9% lower to £73.60/MWh. The annual October 21 contract lost 0.3% to £70.17/MWh, 62.7% higher than the same time last year (£43.12/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power was down 2.5% to £74.25/MWh, following its baseload counterpart lower. June 21 peak power declined 8.4% to £73.60/MWh, and July 21 peak power decreased 4.7% to £75.25/MWh.		Annual October 21 peak power lost 1.0% to £77.38/MWh. This is 58.6% lower than the same time last year (£48.79/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts declined this week, down on average by 1.0%. Winter 21 power decreased 0.2% to £81.00/MWh, while summer 22 fell 1.9% to £58.35/MWh.		Most seasonal peak power contracts declined this week, down 1.1% on average. Winter 21 peak power increased 3.6% to £95.00/MWh, while summer 22 peak power dropped 7.7% to £59.75/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil edged 1.0% higher to average $68.52/bl. The most notable driving force for bullish Brent crude prices this week was the on-going negotiations around a nuclear deal between the US and Iran. The deal itself would see sanctions lift on Iranian oil exports and subsequently lower prices. News circulated that such discussions were not operating as smoothly as first thought which fed into some uncertainty about the deal going ahead, lending support to prices.		EU ETS carbon prices remained high, but lost 1.1% to average €52.65/t. Similar to its European counterpart, UK ETS fell this week, down 1% from the week prior to reach £50.17/t. Stronger renewables output at the week’s start dampened carbon prices across both markets, but most notably on the EU ETS. Similarly, stronger performing international commodity markets continue to feed through into carbon markets.
Wholesale price snapshot