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Energy Market Review, Monday 12th March

Headlines for Monday, 12th March

  • Last week saw substantial losses for day-ahead power and gas prices.
  • While EU ETS carbon prices continued to reach new highs. On 8 March, prices hit a fresh six-year-and-a-half high of €11.1/t. EU ETS carbon prices grew 6.7% to average €10.5/t last week. High volumes of activity on the market, along with strong auction results across the week lead to continued bullish gains for carbon prices.
  • While most gas contracts rose, day-ahead gas fell 46.8% to 53.2p/th. Weakened demand and periods of oversupply on the system aided in weakening gas prices.
  • Similar movements occurred in power contracts, as day-ahead baseload power prices fell 30.9% to £52.9/MWh. Easing power demand and strengthening supply margins supported bearish power prices throughout the week. Day-ahead peak power lost 31.6% to £56.4/MWh. The contract ended the week £3.5/MWh higher than its baseload counterpart.
  • Brent crude oil prices grew 1.5% to average $64.8/bl throughout the week. Brent crude oil prices continue to be weighed down by the bearish fundamentals brought upon by increasing US production.
  • API 2 coal prices fell last week, down 5.5% to average $77.4/t. Prices weakened amid easing European demand also brought prices lower. In contrast, lower Russian and Australian output pegged back losses.

Brent Crude Oil

Brent crude oil prices grew 1.5% to average $64.8/bl throughout the week. Brent crude oil prices continue to be weighed down by the bearish fundamentals brought upon by increasing US production. While the news of the implementation of new US import tariffs on steel and aluminium, also added to bearish movements.

API 2 Coal

API 2 coal prices fell last week, down 5.5% to average $77.4/t. Prices weakened amid a weaker Euro against the US dollar, coupled by bearish oil prices. Easing European demand also brought prices lower. In contrast, lower Russian and Australian output pegged back losses.

EU ETS Carbon

EU ETS carbon prices grew 6.7% to average €10.5/t last week. On 8 March, prices hit a fresh six-year-and-a-half high of €11.1/t. High volumes of activity on the market, along with strong auction results across the week lead to continued bullish gains for carbon prices.

NBP Gas

Near-term

Most near-term gas contracts experienced growth last week, with the exception of losses observed in day-ahead gas. Day-ahead gas fell 46.8% week-on-week to 53.2p/th (down from 100.0p/th).  With a resurgence in temperatures throughout the week demand levels declined after reaching highs the previous week. The weakened demand and periods of oversupply on the system aided in weakening gas prices. Supplies were also strengthened as outages at the SEGAL pipeline and Kollsnes ended. The month-ahead (April) contract gained 6.5% to 50.8p/th last week.

Seasonal

All seasonal gas contracts experienced strong growth last week, gaining 4.3% on average. Summer 18 gas lifted 6.3% to 45.6p/th and the winter 18 contract grew 4.7% to 52.9p/th.

Annual April 18

Annual April 18 gas rose 5.4% to 49.2p/th. The contract is now 8.3% above its price the same time last month (45.4p/th).

Baseload Power

Near-term

Most near-term baseload power contracts decreased last week.  In contrast, day-ahead baseload power prices fell 30.9% to £52.9/MWh. Despite the low levels of wind generation, the resurgence of CCGT and nuclear assets from outages strengthened supplies. Easing power demand also added to bearish power prices throughout the week. The month-ahead (April) contract gained 5.5% to £49.4/MWh.

Seasonal

Most seasonal baseload power prices moved upwards last week, rising on average by 2.7%. Summer 18 power rose 4.8% to £45.6/MWh and the winter 18 contract went up 3.7% to £51.1/MWh.

Annual April 18

The annual April 18 power contract went up 4.2% to £48.4/MWh. In comparison with the same period last month (£45.3/MWh), prices were 4.2% higher.