Smarter Business Weekly Energy Industry Market Review - Desk with graphs

Energy Market Review, Monday 21st May

Headlines for Monday, 21st May

  • Last week observed bullish movements across all tracked commodities, power and gas prices, with an array of contracts reaching new highs.
  • EU ETS carbon prices hit €15.3/t on 17 May, representing a near seven-year high. Carbon prices were influenced by strong auction results and the cancellation of a UK auction that caused a short-term reduction in supply.
  • Oil prices also maintained their bullish trends. On 17 May intraday prices reached a high of $80.1/bl. Prices settled at a fresh three-and-a-half year high of $79.8/bl on the day. Prices have continued to respond to concerns surrounding US sanctions against Iran, with rising expectations that Iranian crude exports will be impacted upon.
  • Day-ahead gas expanded upon the previous week, rising 4.2p/th to 57.3p/th. On 17 May, prices reached a fresh two-month high of 57.9p/th. Prices have been supported by the bullish growth in crude oil which reached highs throughout the week.
  • API 2 coal prices grew 2.4% last week, averaging $87.8/t (up from $85.8/t). On 15 May, prices reached a two-month high of $90.3/t. Coal prices throughout the week continued to track the gains observed in oil prices.
  • Day-ahead power underwent an uptick of 0.8% to £54.7/MWh, up from £51.3/MWh the previous week. Prices were supported by the bullish growth observed across gas and carbon markets.

Brent Crude Oil

Brent crude oil increased 2.2% to average $77.9/bl, up from $76.2/bl the previous week.
On 17 May intraday prices reached a high of $80.1/bl. Prices settled at a fresh three-and-a-half year high of $79.8/bl on the day.
Prices continue to respond to concerns surrounding US sanctions against Iran, with rising expectations that Iranian crude exports will be impacted upon. Growth towards the end of the week was capped by a strengthening US dollar and rising US crude inventories.

API 2 Coal

API 2 coal prices grew 2.4% last week, averaging $87.8/t (up from $85.8/t). On 15 May, prices reached a two-month high of $90.3/t.
Coal prices throughout the week continued to track the gains observed in oil prices. In addition, coal inventories in Qinhuangdao, the main port in Northern China fell by 0.26mn tonnes.

EU ETS Carbon

EU ETS carbon prices ascended 4.4% to average €14.5/t last week. Prices hit €15.3/t on 17 May, representing more than a six-and-a-half year high.
Carbon prices were influenced by strong auction results and the cancellation of a UK auction that caused a short-term reduction in supply.

NBP Gas

Near-term

Day-ahead gas expanded upon the previous week, rising 4.2%th to 57.3p/th. On 17 May, prices reached a fresh two-month high of 57.9p/th.
Prices have been supported by the bullish growth in crude oil which reached highs throughout the week. In addition, North Sea supplies were tightened due to a combination of planned, unplanned and extended outages. Towards the end of the week, an outage at the Kvitebjorn field lowered flows into the Kollsnes processing plant lifting prices.
Month-ahead gas prices rose 4.3% to account for 56.1p/th.

Seasonal

All seasonal gas contracts continued to experience bullish growth, gaining 4.5% on average.
Winter 18 gas lifted 4.0% to 64.2p/th and summer 19 gas increased 5.2% to 50.4p/th.

Annual October 18

Annual October 18 gas went up 4.5% to 57.3p/th.
The contract is 13.6% above its price the same time last month (50.4p/th) and 35.6% higher than the same time last year (42.2p/th).

Baseload Power

Near-term

All near-term baseload power contracts rose last week.
Day-ahead power underwent an uptick of 0.8% to £54.7/MWh, up from £54.3/MWh the previous week.
Prices were supported by the bullish growth observed across gas and carbon markets. However, power prices would have been depressed by the week’s resurgence of wind output. In addition, the return of the BritNed interconnector supported available supplies.

Seasonal

All seasonal baseload power prices climbed last week, increasing on average by 3.6%.
Winter 18 power grew, reaching a fresh three-year price high at £61.3/MWh, an increase of 2.7% from the previous week.
Summer 19 increased 3.8% to £50.8/MWh. This is up from £44.7/MWh last month (an increase of 13.5%).

Annual October 18

The annual October 18 power contract rose 3.2% to £56.0/MWh (up from £54.3/MWh).
This is an increase of £6.1/MWh (12.1%) from the same period last month, and an increase of 38.9% from last year when it was £40.3/MWh.