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Energy Wholesale Market Review, 30 November 2018

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This week, the majority of wholesale power and gas prices fell, whilst commodities experienced mixed movements. Prompt wholesale power and gas contracts moved lower, driven by high levels of wind generation and an oversupplied gas system. All baseload power contracts fell this week. The day-ahead contract plummeted 9.7% to £60.5/MWh. High levels of wind generation pressured day-ahead prices throughout the week with output from transmission connected windfarms exceeding 12GW for the first time on Wednesday. All seasonal baseload power contracts decreased week-on-week, down 0.9% on average. Summer 19 power decreased 0.8% to £56.2/MWh and the winter 19 contract slipped 1.0% to £61.9/MWh. All near-term gas contracts decreased this week, with just the winter 20 and summer 21 contracts moving in the opposite direction. Day-ahead gas fell 7.1% to end the week at 62.6p/th. Near-term contracts continued to be pushed lower by high LNG send-out and the continuation of LNG deliveries into the UK. Most seasonal gas contracts also decreased, down 0.4% on average. Summer 19 gas dropped 1.0% to 55.7p/th and winter 19 gas was 1.2% lower at 63.9p/th. The weekly average Brent crude oil price fell for an eighth consecutive week, losing 6.3% to average $60.3/bl, pressured by oversupply concerns. API 2 coal prices rose 0.9% to average $84.5/t, supported by an increase in German coal-fired generation. EU ETS carbon prices were little changed, increasing 0.2% to average €19.9/t.

Baseload electricity
Day-ahead power fell 9.7% to £60.5/MWh. December 18 power dropped 3.5% to £63.2/MWh and January 19 power lost 1.5% to £66.0/MWh.		Annual April 19 power decreased 0.9% to £59.0/MWh. The contract is 3.2% below the same time last month when it was £57.2/MWh.
Forward curve comparison		Annual April Contract

Peak electricity
Day-ahead peak power dropped 13.0% week-on-week to £65.5/MWh. This was £5.0/MWh above its baseload counterpart, a £3.3/MWh decrease week-on-week. Month-ahead peak power went down 3.2% to end the week at £69.9/MWh, £6.7/MWh above its baseload counterpart.		Week-on-week, annual April 19 peak power went down 0.8% to £64.8/MWh. The contract was £5.8/MWh above its baseload power counterpart. The contract was 2.4% above its price last month (£63.3/MWh) and 29.9% higher than its value last year (£49.9/MWh).
Forward curve comparison		Annual April Contract

Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal baseload power contracts decreased week-on-week, down 0.9% on average. Summer 19 power decreased 0.8% to £56.2/MWh and the winter 19 contract slipped 1.0% to £61.9/MWh.		All seasonal peak power contracts decreased this week, down 0.7% on average. Prices followed their gas counterparts, with seasonal gas contracts 0.4% lower on average.

Commodity price movements
Oil and Coal		Carbon
The weekly average Brent crude oil price fell for an eighth consecutive week, losing 6.3% to average $60.3/bl. Within-day oil prices plummeted to $57.6/bl on 29 November, a 13-month low. This followed news the previous day that US crude stocks rose for a tenth consecutive week, up 3.5mn to their highest since December 2017, 450.4mn barrels. API 2 coal prices rose 0.9% to average $84.5/t, supported by an increase in German coal-fired generation.		EU ETS carbon prices were little changed, increasing 0.2% to average €19.9/t. Prices were relatively stable throughout the week with healthy auction demand countered by the ongoing uncertainty around Brexit’s impact on the EU ETS. The upcoming Market Stability Reserve, commencing in January 2019, could provide support to EU ETS carbon prices over the next month; however, this could be countered by the uncertainty surrounding Brexit and the potential for a lack of demand from UK emitters.

Wholesale price snapshot