23 November 2018

Headlines

This week, the majority of wholesale power and gas prices fell, following Brent crude oil and API 2 coal prices lower. Prompt wholesale power and gas contracts were pressured by revised temperature forecasts, which are higher than previously expected for the rest of 2018. Most baseload power contracts fell this week. The day-ahead contract slid 4.6% to £67.0/MWh. Wind generation is forecast to reach 10.0GW on 28 November, with the return of Heysham 2 nuclear plant on 24 November offering further supply security. Day-ahead gas dropped 3.9% to end the week at 67.3p/th. Prices were pressured by milder temperature forecasts and the gas system being oversupplied across the week amid high LNG send-out. The weekly average Brent crude oil price fell for a seventh consecutive week, down 5.3% to average $64.3/bl. Oil prices plummeted to $58.9/bl during the day on 23 November. This followed news earlier in the week that US crude stocks rose for a ninth consecutive week to their highest level since December 2017. API 2 coal prices dropped 4.6% to average $83.7/t, down from $87.8/t the previous week. Prices fell to $83.0/t on 21 November, the lowest since April as Chinese demand for the commodity continues to fall following the country’s decision to stop seaborne thermal coal imports until 2019. EU ETS carbon prices continued to recover, experiencing a third consecutively weekly rise. Prices were up 1.3% to average €19.9/t and ended the week above €21.0/t for the first time in seven weeks.

Baseload electricity
  • Day-ahead power dropped 4.6% to £67.0/MWh.
  • The contract started the week at £60.3/MWh, with higher wind generation expected the following day.
  • December 18 and January 19 power lowered 6.1% and 4.3% to £65.5/MWh and £67.0/MWh respectively.
  • Annual April 19 power decreased 2.2% to £59.6/MWh.
  • The contract is 2.2% below the same time last month when it was £59.9/MWh, and 33.0% above the same period last year (£44.8/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 23 November 2018

 

Annual October Contract

Baseload electricity Annual April contract 23 November 2018

Peak electricity
  • Day-ahead peak power gained 3.1% week-on-week to £75.3/MWh. This was £8.3/MWh above its baseload counterpart, a £5.3/MWh increase week-on-week.
  • Month-ahead peak power went down 6.4% to end the week at £72.2/MWh, £6.7/MWh above its baseload counterpart.
  • Week-on-week, annual April 19 peak power went down 1.8% to £65.4/MWh. The contract was £5.8/MWh above its baseload power counterpart.
    The contract was 0.3% below its price last month (£65.6/MWh) and 29.6% higher than its value last year (£50.5/MWh).

Forward curve comparison

 Peak electricity Forward curve comparison 23 November 2018

Annual April Contract

Peak Electricity Annual April contract 23 November 2018

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 23 November 2018

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 23 November 2018

  • Most seasonal baseload power contracts fell, down 1.0% on average, with summer 21 the exception.
  • Summer and winter 19 power went down 2.6% and 1.9% to £56.7/MWh and £62.5/MWh respectively.
  • All seasonal peak power contracts decreased this week, down 1.2% on average.
  • Prices followed their gas counterparts, with seasonal gas contracts 3.0% lower on average.
Commodity price movements

Oil and Coal

 Commodity price movements Oil and Coal 23 November 2018

Carbon

Commodity price movements Carbon 23 November 2018

  • The weekly average Brent crude oil price fell for a seventh consecutive week, down 5.3% to average $64.3/bl.
  • Within-day oil prices plummeted to $58.9/bl on 23 November, a 13-month low.
  • This followed news earlier in the week that US crude stocks rose for a ninth consecutive week to their highest since December 2017 at 446.9mn barrels.
  • API 2 coal prices dropped 4.6% to average $83.7/t, down from $87.8/t the previous week.
  • Prices fell to $83.0/t on 21 November, the lowest since April as Chinese demand for the commodity continues to fall following the country’s decision to stop seaborne thermal coal imports until 2019.
  • EU ETS carbon prices continued to recover, experiencing a third consecutively weekly rise.
  • Prices were up 1.3% to average €19.9/t and ended the week above €21.0/t for the first time in seven-weeks.
  • Prices have resurged as cheaper coal prices and favourable clean dark spreads have increased demand for permits in Europe.
  • With API 2 coal prices expected to remain near or below current levels, EU ETS carbon could rise further as coal fired-power generation becomes economically attractive compared to gas.
Wholesale price snapshot

Wholesale price snapshot 23 November 2018

 

Posted by TEAM on 23 November 2018
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