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

Baseload electricity Forward curve comparison 6 March 2020

Annual October Contract

Baseload electricity Annual April contract 6 March 2020

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

Peak electricity Forward curve comparison 28 February 2020

Annual October contract

Peak electricity Annual April contract 28 February 2020

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 6 March 2020

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 6 March 2020

  • 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

Commodity price movements Oil and Coal 6 March 2020

Carbon

Commodity price movements Carbon 6 March 2020

  • 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

Wholesale price snapshot 6 March 2020

Posted by TEAM on 9 March 2020
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