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Energy Wholesale Market Review, 6 March 2020

Headlines

Most power and gas contracts rose this week, with day-ahead power as the only exception. Day-ahead gas rose 1.7% to 24.40p/th following an increase gas demand. Day-ahead power fell 5.4% to £33.25/MWh despite reaching £43/MWh midweek as significant fluctuations in wind generation saw prices rise and fall this week. April 20 gas was up 5.1% at 22.19p/th, and May 20 gas increased 1.6% to 22.19p/th. All seasonal gas contracts boosted this week, up by 4.2% on average, while summer 20 and winter 20 gas increased 4.0% and 3.6% to 22.88p/th and 35.63p/th, respectively. All seasonal power contracts lifted this week, up on average by 2.5%, as summer 20 and winter 20 gained 2.1% and 2.5% to £33.45/MWh and £43.22/MWh, respectively. Brent crude oil fell 5.1% to $51.20/bl as the spread of the coronavirus on a global scale continues to impact stock and commodity markets. There were hopes that prices could lift on news of the outcome of the meeting of OPEC and OPEC+ allies in Vienna this week, although it appears that no agreement will be reached on deepening production cuts. API 2 coal saw marginal gains this week, rising 0.6% to average $57.40/t as lower stocks were reported at ARA terminals. EU ETS carbon prices followed oil and lost 1.3% to average €23.74/t this week, following lower demand for allowances in this week’s EU-wide auctions.

Baseload electricity
Day-ahead power fell 5.4% to £33.25/MWh despite reaching £43/MWh midweek on a significant drop-off in wind generation. April 20 power climbed 2.6% to £33.03/MWh and May 20 power increased 4.3% to £34.00/MWh.		Q220 power moved 3.0% higher to £33.47/MWh. The Annual April 20 contract rose 2.4% to £38.34/MWh, 26.3% lower than the same time last year (£52.01/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 0.7% at £38.25/MWh, following its baseload counterpart higher. April 20 peak power gained 0.9% to £35.50/MWh, and May 20 peak power increased 0.1% to £36.35/MWh.		The Annual April 20 peak power lost 2.8% to 43.92/MWh. This is 24.6% lower than the same time last year (58.24/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts increased this week, up on average by 2.5%. Summer 20 and winter 20 expanded 2.1% and 2.5% respectively, rising to £33.45/MWh and £43.22/MWh.		All seasonal peak power contracts also rose this week, up £2.9% on average. Summer 20 and winter 20 peak power increased 2.2% and 3.3% respectively, falling to £37.45/MWh and £50.39/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil fell 5.1% to average $51.20/bl as oil prices extended two-year lows, falling to $48.18/bl on 6 March. The spread of the coronavirus on a global scale continues to impact stock and commodity markets. There were hopes that prices could lift on news of the outcome of the meeting of OPEC and OPEC+ allies in Vienna this week. Latest reports are that the deal of deeper production cuts could be in jeopardy, with Russia currently refusing to agree additional cuts worth 1.5mn bpd of global supply.		API 2 coal saw marginal gains this week, rising 0.6% to average $57.40/t as lower stocks were reported at ARA terminals. EU ETS carbon prices followed oil and lost 1.3% to average €23.74/t this week, following lower demand for allowances in this week’s EU-wide auctions.
Wholesale price snapshot