Energy Wholesale Market Review, 7 May 2021

Headlines

It was a largely bullish week again for gas and power markets. Day-ahead gas rose 0.4% to 62.00p/th, following periods of system undersupply, coupled with colder temperatures and a drop in LNG send out. Day-ahead power rose 11.7% to £69.25/MWh, with periods of notably low wind generation and reduced temperatures generally throughout the week. Record carbon highs also fed through into short-term power prices. June 21 gas was up 7.8% at 61.79p/th, and July 21 gas increased 7.4% to 59.98p/th. Most seasonal gas contracts boosted this week, up by 3.3% on average, while both winter 21 and summer 22 gas increased 4.6% and 4.3% respectively, lifting to 67.86p/th and 47.90p/th. All seasonal power contracts saw gains this week, up on average by 4.1%, as winter 21 and summer 22 expanded 3.8% and 4.8% respectively, rising to £78.13/MWh and £58.00/MWh. Brent crude oil prices rose this week, up 3.1% to average $68.63/bl. At the week’s start, prices benefitted from expected increases in US and European fuel demand, despite spiralling COVID-19 cases in major consuming countries such as Brazil and India. This softened demand recovery concerns in the market. EU ETS carbon prices rose this week, rising 3.5% to average €49.15/t. Prices once again broke all-time record highs, clearing €50/t on 6 May.

Baseload electricity
  • Day-ahead power rose 11.7% to £69.25/MWh, following notable reductions in wind generation through select periods of the week and continued colder temperatures generally.
  • June 21 power climbed 0.4% at £69.96/MWh and July 21 power increased 6.3% to £70.9/MWh.
  • Q321 power moved 1.3% higher to £69.58/MWh.
  • The annual October 21 contract rose 4.2% to £68.07/MWh, 66.7% higher than the same time last year (£40.83/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 7 May 2021

Annual April Contract

Baseload electricity Annual April contract 7 May 2021

Peak electricity
  • Day-ahead peak power was up 2.5% to £71.00/MWh, following its baseload counterpart higher.
  • June 21 peak power gained 2.4% at £75.25/MWh, and July 21 peak power increased 1.7% to £76/MWh.
  • The annual October 21 peak power lost 5.1% to £73.5/MWh.
  • This is 56.5% lower than the same time last year (46.97/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 7 May 2021

Annual April contract

Peak electricity Annual April contract 7 May 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 7 May 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 7 May 2021

  • All seasonal power contracts boosted this week, up on average by 4.1%.
  • Winter 21 and summer 22 expanded 3.8% and 4.8% respectively, rising to £78.13/MWh and £58.00/MWh.
  • Most seasonal peak power contracts boosted this week, up 2.2% on average.
  • Winter 21 gas increased 8.9% to £87.25/MWh, while summer 22 peak power dropped 0.0% to £59.75/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Coal 7 May 2021

Carbon

Commodity price movements Carbon 7 May 2021

  • Brent crude oil prices rose this week, up 3.1% to average $68.63/bl.
  • At the week’s start, prices benefitted from expected increases in US and European fuel demand, despite spiralling COVID-19 cases in major consuming countries such as Brazil and India. This softened demand recovery concerns in the market.
  • Similarly, the easing of lockdown restrictions in parts of Europe added to this demand recovery optimism supporting market recovery optimism.
  • EU ETS carbon prices rose this week, rising 3.5% to average €49.15/t. Prices once again broke all-time record highs, clearing €50/t on 6 May.
  • EU ETS carbon continues to rise to new highs, also drawing on the price rises made in oil markets.
  • This week in particular, carbon prices were lifted by strong policy signals, continuing the recent momentum from EU climate targets for 2030. Similarly, colder weather forecasts continue to add more bullish momentum to prices.
Wholesale price snapshot 

Wholesale price snapshot 7 May 2021

Posted by TEAM on 10 May 2021
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