14 September 2018

Headlines

All gas and power contracts decreased week-on-week reversing recent trends of sustained upwards price movements. Contracts were weighed on as EU ETS carbon fell from a 10-year high of €25.8/t on 10 September to below €19.0/t towards the end of the week as hedge funds and speculators exited positions and traders chased short-term profits. Prices recovered to end the week at €20.3/t and average EU ETS carbon prices rose for the twelfth consecutive week, increasing 9.9% to €23.2/t. Day-ahead gas prices fell 4.0% to 71.5p/th amid comfortable supplies and October 18 gas ended the week down 4.6% at 70.6p/th. Day-ahead power prices lowered 4.2% to end the week at £66.6/MWh, with the contract weighed on by a significant rise in wind generation following recently low output. October 18 power fell 4.3% to £67.3/MWh. All seasonal gas and power contracts decreased week-on-week, despite hitting fresh highs on our records towards the start of the week. Seasonal gas contracts fell 2.2% on average with winter 18 gas decreasing 3.5% to 76.5p/th. Seasonal power contracts declined 3.0% on average, with winter 18 power down 3.4% to £71.3/MWh. The weekly average Brent crude oil price rose for the fourth consecutive week, gaining 0.3% to average $78.2/bl, up from $77.9/bl. Prices hit a fresh three-and-a-half year high of $80.0/bl on 12 September. API 2 coal rose 1.8% to average $95.9/t this week.

Baseload electricity
  • Day-ahead power lost 4.2% week-on-week to £66.6/MWh.
  • Day-ahead prices fluctuated throughout the week but were weighed on by a significant rise in wind generation following recently low output.
  • October 18 and November 18 power fell, losing 4.3% and 4.6% to £67.3/MWh and £71.4/MWh respectively.
  • The annual October 18 power contract declined 2.9% to end the week at £65.4/MWh (down from £67.4/MWh).
  • The contract is £5.3/MWh (8.7%) higher than the same period last month, and 49.4% above the same time last year when it was £43.8/MWh.

Forward curve comparison

Forward Curve Comparison 14 September 2018

Annual October Contract

Annual October Contract 14 September 2018

Peak electricity
  • Day-ahead peak power reversed the previous week’s gains, dropping 4.7% week-on-week to £70.5/MWh. This was £3.9/MWh above its baseload counterpart.
  • Month-ahead peak power fell 4.9% to end the week at £72.2/MWh, £4.9/MWh above its baseload counterpart.
  • Week-on-week, annual October 18 peak power decreased 2.1% to £71.1/MWh. The contract is £5.7/MWh above its baseload power counterpart.
  • The contract was 8.8% above its price last month (£65.3/MWh).

Forward curve comparison

Peak Electricity Forward Curve Comparison 14 September 2018

Annual October Contract

Peak Electricity Annual October Contract 14 September 2018

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices baseload power contracts 14 September 2018

Seasonal baseload power curve

Seasonal power prices baseload power curve 14 September 2018

  • Week-on-week, seasonal contracts were down 3.0% on average, despite all seasonal contracts hitting fresh record highs at the start of the week.
  • Winter 18 power, which peaked at £75.4/MWh on 10 September, ended the week down at £71.3/MWh (down 3.4% from the previous week).
  • Week-on-week, seasonal peak power contracts decreased 2.8% on average. Prices followed a decline in gas and carbon prices.
  • The winter 18 and summer 19 peak power contracts decreased 3.9% and 2.7% to £78.2/MWh and £64.0/MWh respectively.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Gas 14 September 2018

Carbon

Commodity price movements Carbon 14th September 2018

  • The weekly average Brent crude oil price rose for the fourth consecutive week, gaining 0.3% to average $78.2/bl, up from $77.9/bl.
  • Prices continued to gain throughout the week ahead of the upcoming US sanctions on Iran, which has created some speculation of upcoming tightness in the market and led prices to a fresh three-and-a-half year high of $80.0/bl intraday on 12 September.
  • API 2 coal rose 1.8% to average $95.9/t this week.
  • According to vessel tracking data, global coal shipments have grown by 3.8% between January and August this year, up to 835.5mn tonnes.
  • Average EU ETS carbon prices rose for the twelfth consecutive week, increasing 9.9% to €23.2/t.
  • EU ETS carbon hit a fresh 10-year high of €25.8/t on 10 September.
  • Prices fell from the high to below €19.0/t on 13 September, experiencing its biggest daily drop since 2006. Prices recovered to end the week at €20.3/t.
  • Consultancy Wattsight have reforecast their 2020-2030 average EU ETS price expectations up €1.0/t to €19.0/t due to reduced competitiveness for gas relative to hard coal.
Wholesale price snapshot

Wholesale Price Movement 14 September 2018

Posted by TEAM on 14 September 2018
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