Energy Wholesale Market Review, 30 July 2021

Headlines

It was another mostly bullish week for gas and power contracts in GB this week, continuing trends observed across much of July. Day-ahead gas rose 13.3% to 102.00p/th, following periods of undersupply during the week and buoyed by prolonged maintenance works across the NCS reducing flows into GB from Norway. Day-ahead gas prices reached a three-year high on 29 July, at 103.75p/th. Day-ahead power lifted 5.2% to £101/MWh, taking direction from notable gains made in near-term gas markets and low wind output during the week. August 21 gas was up 14.9% at 102.20p/th, and September 21 gas increased 12.7% to 102.20p/th. Most seasonal gas contracts boosted this week, up by 5.0% on average, with winter 21 and summer 22 gas increasing 8.1% and 7.4%, to 101.20p/th and 60.15p/th respectively. All seasonal power contracts traded higher this week, up on average by 3.9%. Winter 21 and summer 22 power went up 6.3% and 5.1% respectively, rising to £100.95/MWh and £66.20/MWh. Brent crude oil rebounded this week, rising from losses seen in the week prior. Subsequently, prices were 4.8% higher at $74.93/bl. This week was the first time in almost a month where carbon prices rose; following three consecutive weeks of decline the EU ETS reversed this trend, up 2.7% to €53.38/t. The UK ETS shared this bullish sentiment, also up marginally to £43.40/t.

Baseload electricity
  • Day-ahead power rose 5.2% to £101/MWh, following gas prices higher on the near-curve, with further support coming from periods of low wind output.
  • August 21 power climbed 13.8% to £101.7/MWh and September 21 power increased 10.0% to £99.7/MWh.
  • Q421 power moved 8.9% higher to £104.3/MWh.
  • The annual October 21 contract rose 5.8% to £83.58/MWh, 85.3% higher than the same time last year (£45.1/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 30 July 2021

Annual April Contract

Baseload electricity Annual October contract 30 July 2021

Peak electricity
  • Day-ahead peak power was down 8.3% to £94.50/MWh, despite reported gains in its baseload counterpart.
  • August 21 peak power gained 14.3% at £101.75/MWh, and September 21 peak power increased 4.9% to £102/MWh.
  • The annual October 21 peak power lost 1.0% to £84.35/MWh.
  • This is 66.8% lower than the same time last year (50.57/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 30 July 2021

Annual April contract

Peak electricity Annual October contract 30 July 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 30 July 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 30 July 2021

  • All seasonal power contracts boosted this week, up on average by 3.9%.
  • Winter 21 and summer 22 lifted 6.3% and 5.1% respectively, rising to £100.95/MWh and £66.20/MWh.
  • Most seasonal peak power contracts declined this week, down 4.9% on average.
  • Winter 21 gas dropped 2.2% to £102.70/MWh, while summer 22 peak power increased 6.5% to £66.00/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 30 July 2021

Carbon

Commodity price movements Carbon (UK and EU ETS) 30 July 2021

  • Brent crude oil rebounded this week, rising from losses reported in the week prior. Subsequently, prices were 4.8% higher at $74.93/bl.
  • Prices at the week’s start were aided by expectations of a tighter supply output and rising vaccination rates helping to offset the impact of rising Covid-19 cases on future demand growth.
  • Similarly, reports of lowering US crude inventories continued to support a more bullish picture for Brent crude prices this week, helping to ease supply concerns in the market.
  • This week was the first time in almost a month where carbon prices rose; following three consecutive weeks of decline the EU ETS rebounded, up 2.7% to €53.38/t.
  • The UK ETS shared this bullish sentiment, also up marginally to £43.40/t.
  • Low auction supply volumes expected for August continued to bolster prices, with carbon prices also taking direction from price rises across the wider commodity markets.
Wholesale price snapshot 

Wholesale price snapshot 30 July 2021

Posted by TEAM on 30 July 2021
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