Energy Wholesale Market Review, 9 April 2021

Headlines

It was a largely bullish week again for gas and power contracts this week. Day-ahead gas rose 3.5% to 52.80p/th, supported by the colder weather experienced across the UK in recent days. Day-ahead power increased 16.7% to £66.5/MWh, following gains made on the gas near curve, whilst also supported by low wind output throughout the week. May 21 gas was up 0.6% at 47.63p/th, and June 21 gas increased 0.7% to 47.70p/th. Seasonal gas contracts largely saw gains this week, up 0.7% on average, with winter 21 gas rising 1.4% to 55.83p/th, while summer 22 gas dropped 0.5% to 41.28p/th. Most seasonal power contracts experienced similar movements, rising on average by 0.9%, as winter 21 and summer 22 expanded 1.5% and 1.0% respectively, rising to £66.50/MWh and £50.60/MWh. Brent crude oil prices fell this week, down 1.4% to average $63.10/bl. Bearishness stemmed from demand concerns and easing of OPEC+ supply cuts. Prices at the weeks start were largely impacted by the continued uncertainty surrounding Covid-19 travel restrictions, impacting future oil demand growth. EU ETS carbon prices rose this week, rising 4.0% to average €43.32/t. Prices also broke a fresh all-time high again on 6 April at €44.19/t, driven by high EUA demand with auctions recommencing after the Easter break.

Baseload electricity
  • Day-ahead power rose 16.7% to £66.5/MWh, following gains made on the gas near curve and lower wind generation observed throughout the week.
  • May 21 power climbed 1.0% at £57.25/MWh and June 21 power increased 0.5% to £58.01/MWh.
  • Q321 power moved 1.8% higher to £58.25/MWh.
  • The annual October 21 contract rose 1.3% to £58.55/MWh, 37.4% higher than the same time last year (£42.6/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 9 April 2021

Annual April Contract

Baseload electricity Annual April contract 9 April 2021

Peak electricity
  • Day-ahead peak power was up 18.8% to £71.25/MWh, following gains made from its baseload counterpart.
  • May 21 peak power gained 0.1% at £61.17/MWh, and June 21 peak power decreased 0.7% to £62.8/MWh.
  • The annual October 21 peak power lost 1.1% to £66.33/MWh.
  • This is 35.7% lower than the same time last year (48.88/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 9 April 2021

Annual April contract

Peak electricity Annual April contract 9 April 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 9 April 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 9 April 2021

  • Most seasonal power contracts boosted this week, up on average by 0.9%.
  • Winter 21 and summer 22 expanded 1.5% and 1.0% respectively, rising to £66.50/MWh and £50.60/MWh.
  • All seasonal peak power contracts increased this week, up 0.6% on average.
  • Winter 21 and summer 22 peak power increased 1.6% and 1.5% to £75.42/MWh and £55.76/MWh, respectively.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Coal 9 April 2021

Carbon

Commodity price movements Carbon 9 April 2021

  • Brent crude oil prices fell this week, down 1.4% to average $63.10/bl. Brent crude prices favoured more bearish fundamentals this week, with demand concerns and easing of supply cuts weighing.
  • Prices at the weeks start were predominately negatively affected by the news of on-going future demand growth concerns following announcements in the UK that it could extend the current ban on foreign travel past 17 May, should the prevalence of Covid-19 cases continue to increase overseas.
  • Meetings held between Saudi Arabia and OPEC+ members also concluded a general easing to supply cuts into May.
  • EU ETS carbon prices rose this week, rising 4.0% to average €43.32/t. Prices also broke a fresh all-time high again on 6 April at €44.19/t.
  • Carbon markets continued upward movement this week, in spite of more bearish fundamentals presented in wider commodity markets.
  • A contributing factor to the notable gains made in carbon markets this week was the higher EUA auction demand following the bank holiday period. To put into context, reports indicated around 6.2mn bids for approximately 3.3mn of allowances.
Wholesale price snapshot 

Wholesale price snapshot 9 April 2021

Posted by TEAM on 9 April 2021
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