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Energy Wholesale Market Review, 8 November 2019

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Most power and gas contracts decreased this week, with day-ahead contracts the exceptions. Day-ahead gas rose 41.6% to finish the week at 40.0p/th, following a forecast drop in temperatures, while day-ahead power gained 13.1% to £44.4/MWh as wind generation dropped mid-week. December 19 gas was up 0.4% at 42.8p/th, and January 20 gas decreased 0.5% to 45.0p/th. All seasonal gas contracts declined this week, down 0.5% on average. Summer 20 gas dropped 0.9% to 39.3p/th and winter 20 gas declined 0.3% to 49.5p/th. All seasonal power contracts declined further this week, going down 0.7% on average. Summer 20 power fell 0.6% to end the week at £45.4/MWh, while the winter 20 contract slipped 0.5% to £52.8/MWh. Brent crude oil gained 2.2% to average $62.3/bl this week, following the shutdown of the Keystone pipeline after an oil spill. Delegates from OPEC this week have said that the organisation is more likely to encourage members to comply more fully with existing agreements to pledge to cut supplies by 1.2mn bpd. EU ETS carbon reversed last week’s gains, losing 1.4% to €25.2/t, amid weak auction results and waning German economic data. API 2 dropped 1.7% to average $64.1/t.

Baseload electricity
Day-ahead power rose 13.1% to £44.4/MWh as wind generation dropped mid-week. December 19 power slipped 0.6% to £48.8/MWh while January 20 power fell 1.4% to £51.5/MWh.		Q120 power slipped 1.2% to £50.9/MWh. The annual April 20 power contract lost 0.5% to £49.1/MWh, 9.2% lower than the same time last year (£54.1/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power reversed last week’s gains, rising 11.1% to £48.9/MWh, £4.5/MWh above its baseload counterpart. December 19 peak power fell 1.3% to £54.7/MWh. January 20 peak power decreased 1.2% to £58.7/MWh.		Annual April 20 peak power was 0.7% lower at £54.5/MWh, £5.4/MWh above its baseload power counterpart. The contract is 10.7% below its value this time last year (£61.1/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts declined further this week, going down 0.7% on average. Summer 20 power fell 0.6% to £45.4/MWh, while the winter 20 slipped 0.5% to £52.8/MWh.		Seasonal peak power contracts were 4.7% lower on average. Summer 20 peak power fell 0.6% to £49.1/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil gained 2.2% to average $62.3/bl this week. Prices were supported by the shutdown of the Keystone pipeline following an oil spill. Delegates from OPEC this week have said that the organisation is more likely to encourage members to comply more fully with existing agreements to pledge to cut supplies by 1.2mn bpd. API 2 coal prices dropped a further 1.7% to $64.1/t, down 29.0% on the same time last year.		EU ETS carbon reversed last week’s gains, losing 1.4% to €25.2/t. Weak auction results and waning German economic data weighed on prices. However, losses were offset by reduced auction volumes in Poland. Carbon price plans for post-Brexit have been outlined, with a “UK ETS” system that is linked to the current EU ETS with similar environmental ambition being preferred. However, such a linkage will need to be ratified by EU member nations.
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