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Energy Wholesale Market Review, 31 July 2020

Headlines

The majority of gas and power contracts marked consecutive weekly losses, with some near-term contracts as exceptions. Day-ahead gas fell 2.3% to 13.00p/th as a result of continuous low levels of national demand this week. Day-ahead power rose 11.1% to £35.00/MWh, supported by falling wind generation forecasts. August 20 gas was up 13.0% at 15.65p/th and September 20 gas increased 27.8% to 19.04p/th. All seasonal gas contracts declined this week, down by 2.8% on average, while both winter 20 and summer 21 gas dropped 1.3% and 3.4% respectively, subsiding to 31.47p/th and 28.21p/th. Seasonal power contracts dropped 2.0% on average this week. Winter 20 power lifted 0.4% to £44.72/MWh, while summer 21 power fell 1.9% to £39.00/MWh. Despite some minor volatility midweek, Brent crude oil prices held fairly steady to average $43.44/bl this week, 1.0% lower than the previous week. The largest driver of oil prices continues to be COVID-19, with the markets recently reacting bearishly to a rising number of cases around the world. EU ETS carbon dropped again this week, as weak demand in EUA auctions saw prices move 4.0% lower to €25.84/t.

Baseload electricity
Day-ahead power rose 11.1% to £35/MWh, supported by lower wind generation towards the end of the week. August 20 power climbed 4.3% to £31.7/MWh and September 20 power increased 2.4% to £33.7/MWh.		Q420 power moved 0.5% higher to £42/MWh. The annual October 20 contract lost 0.7% to £41.86/MWh, 20.9% lower than the same time last year (£52.94/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 18.9% to £37.75/MWh. August 20 peak power gained 2.0% to £35.3/MWh, and September 20 peak power stayed at £37.28/MWh.		The annual October 20 peak power contract lost 2.2% to £46.92/MWh. This is 21.3% lower than the same time last year (59.65/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Seasonal power contracts declined by 2.0% on average, this week. Winter 20 power lifted 0.4% to £44.72/MWh, while summer 21 power fell 1.9% to £39/MWh.		All seasonal peak power contracts declined this week, down 2.8% on average. Winter 20 and summer 21 peak power dropped 1.6% and 3.0% respectively, falling to £51.23/MWh and £42.6/MWh.
Commodity price movements
Oil and Coal		Carbon
Despite some minor volatility midweek, Brent crude oil prices held fairly steady to average $43.44/bl this week, 1.0% lower than the previous week. The largest driver of oil prices continues to be COVID-19, with the markets recently reacting bearishly to a rising number of cases around the world. Economic statistics, such as the latest publication of US GDP data, continues to limit gains in the Brent price, with low expectations of a full revival in global demand for the commodity anytime soon. Prices were upheld midweek as the EIA published data indicating the largest weekly drop in US oil inventories since December. Stock levels dropped by 10.6mn barrels as a result of fewer oil imports into the states.		EU ETS carbon dropped again this week, as weak demand in EUA auctions saw prices move 4.0% lower to €25.84/t. More widely, the carbon price continues to draw influence from bearish equity markets and power demand amid COVID-19. API 2 coal prices fell by 1.3% this week to average $59.41/t, with uncertainty over the direction that global demand for the commodity will take.
Wholesale price snapshot