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Energy Wholesale Market Review, 9 October 2020

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The majority of power and gas contracts experienced growth this week. Day-ahead power increased 10.4% to £48.55/MWh, owing to a rise in demand as a result of falling temperatures. The month-ahead contract slipped 0.2% to £49.85/MWh as one of only two power contracts to decline this week. December 20 power rose 0.5% to £50.75/MWh. Summer 21 power moved 3.1% higher to £44.00/MWh, with winter 21 also increasing 2.3% to £50.70/MWh. All gas contracts increased this week, indicative of increased demand experienced across GB and Continental Europe. Day-ahead gas lifted 20.3% to 38.50p/th, with colder temperatures outweighing the impact of an oversupplied system throughout the majority of the week. November 20 gas rose 7.8% to 38.55p/th, with December 20 gas rising 6.6% to 41.00p/th. Summer 21 gas rose 6.4% to 34.75p/th and the winter 21 contract climbed 3.9% to 43.60p/th. Brent crude oil rose 1.6% to average $41.86/bl, gaining momentum from the news US president, Donald Trump left hospital and returned to the Whitehouse, having tested positive for the Coronavirus last week. Similarly, potential supply shortages amid strike action from oil field service workers in Norway has lent support to prices this week. EU ETS gained 0.3% to average €26.63/t, reversing trends seen last week. However, impacts of Brexit on the structure of EU ETS trading continue to loom over the market at present.

Baseload electricity
Day-ahead power rose 10.3% to £48.55/MWh, owing to increases in demand observed as the week progressed. November 20 power slipped 0.2% to £49.85/MWh and December 20 power increased 0.5% to £50.75/MWh.		Q121 power moved 1.7% higher to £52.4/MWh. The annual April 21 contract rose 2.6% to £47.35/MWh, 5.0% lower than the same time last year (£49.86/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power went down 5.7% to £46.70/MWh, countering trends seen by its baseload counterpart. November 20 peak power declined 4.2% to £61.65/MWh, and December 20 peak power decreased 2.4% to £59.49/MWh.		The annual April 21 peak power contract lost 1.1% to £53.14/MWh. This is 6.7% lower than the same time last year (56.98/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Most seasonal power contracts boosted this week, up on average by 2.1%. Summer 21 power gained 3.1% and winter 21 power climbed 2.3% to £44.00/MWh and £50.70/MWh, respectively.		All seasonal peak power increased this week, up 1.1% on average. Summer 21 and winter 21 peak power increased 1.6% and 0.7% to £48.66/MWh and £57.61/MWh, respectively.
Commodity price movements
Oil and Coal		Carbon
Following a slight decline from the previous week, Brent crude oil rose this week, seeing a 1.6% increase to average $41.86/bl. Reversing previous market fears surrounding the health of US President, Donald Trump – the market reacted positively to news president Trump had left hospital and returned to the Whitehouse. In contrast, API 2 coal declined 0.5% to $59.79/t.		Following the previous week’s decline EU ETS carbon prices rose this week, reversing a two week consecutive decline. Prices rose 0.3% to average €26.72/t. Despite the uplift this week, a general sentiment of a looming ‘hard Brexit’ continues to weigh on prices. Concerns remain as to the structure of EU ETS carbon trading and its functionality when the UK ultimately removes itself from the European Union. Prices generally remain relatively low in comparison to recent weeks, where prices observed were upwards of €29.00/t.
Wholesale price snapshot