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Energy Wholesale Market Review, 7 February 2020

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The majority of short-term power and gas contracts fell this week, with some future seasonal contracts gaining despite substantial losses seen in the day-ahead contracts. Day-ahead gas fell 7.3% to end the week at 22.75p/th, with forecasts of fluctuating temperatures seeing gas extend losses this week. Day-ahead power followed gas and fell 15.9% to £26.50/MWh as expected high wind generation next week pushed prices lower. March 20 gas was down 5.9% at 22.27p/th, and April 20 gas decreased 7.1% to 22.10p/th. Most seasonal gas contracts traded higher this week, up by 2.8% on average. This was despite the summer 20 gas dropping 3.4% to 23.61p/th, while winter 20 gas increased 2.3% to 35.86p/th. Seasonal power contracts generally boosted this week, up on average by 1.0%, as summer 20 power expanded 2.3% to £34.00/MWh, while winter 20 fell 0.7% to £43.00/MWh. Brent crude oil fell by 6.0% to $55.36/bl as the spread of the coronavirus continued to impact global markets, though the majority of falls came earlier in the week as the commodity price steadied later on. EU ETS carbon slipped by 2.9% to €23.33/t to follow oil and gas prices lower, while API 2 coal lost by 0.6% to $60.28/t despite predictions that prices could rise due to increasing demand in China.

Baseload electricity
Day-ahead power fell 15.9% to £26.50/MWh despite rising to near £38/MWh on low wind generation midweek. March 20 power slipped 4.1% to £32.79/MWh and April 20 power decreased 3.7% to £33.25/MWh.		Q220 power moved 2.3% lower to £33.88/MWh. The Annual April 20 contract lost 0.6% to £38.50/MWh, 28.0% lower than the same time last year (£53.45/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was down 3.9% to £35.70/MWh, following its baseload counterpart lower. March 20 peak power declined 13.6% at £32.79/MWh, and April 20 peak power decreased 12.9% to £38.41/MWh.		The Annual April 20 peak power lost 12.9% to 38.41/MWh. This is 35.2% lower than the same time last year (59.30/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts increased this week, up on average by 1.0%. Summer 20 power expanded 2.3% to £34.00/MWh, while winter 20 fell 0.7% to £43.00/MWh.		Most seasonal peak power contracts declined this week, down £12.6% on average. Summer 20 and winter 20 peak power dropped 12.4% and 13.2% respectively, falling to £33.81/MWh and £43.00/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil fell by 6.0% to average $55.36/bl as oil prices steadied towards the end of the week. Much of the losses were seen over the weekend as prices dropped nearly 4% to open this week at 56.13p/th. News of the continued outbreak of the coronavirus has dampened global markets again this week while the report of increase US inventories extended losses. The most likely gains in prices will come from the outcome of any decision by OPEC allies – who met this week to discuss deeper cuts to global oil supply. API 2 coal was relatively unchanged again this week, falling by 0.6% to average $60.51/t.		EU ETS carbon decreased 2.9% to average €23.33/t this week despite an upwards swing in momentum in the middle of the week. Prices extended four-month lows this week, dropping to €23.19/t on 4 February. Accompanying a small jump in oil prices on 4 February, EU ETS prices rose to a weekly high of €23.53/t on 6 February, before closing the week at 24.28/t.
Wholesale price snapshot