
WEEKLY ENERGY MARKET UPDATE - 06/02/2023
6 Feb 2023
Last Week’s Pricing & Commentary
Commodity |
Unit |
Settlement Price |
Change Since 01 Jan 23 |
UK Gas NBP Mar 23 |
p/therm |
147.89 |
-13.61% |
UK Gas NBP Summer 23 |
p/therm |
154.21 |
-18.72% |
UK Gas NBP Winter 23 |
p/therm |
180.50 |
-15.96% |
UK Power Base Mar 23 |
£/MWh |
152.18 |
-18.28% |
UK Power Base Summer 23 |
£/MWh |
157.42 |
-17.74% |
UK Power Base Winter 23 |
£/MWh |
190.81 |
-14.44% |
Carbon EUA Dec 23 |
€/tonne |
93.29 |
11.63% |
Carbon UKA Dec 23 |
£/tonne |
83.87 |
18.58% |
Oil Brent Crude Apr 23 |
$/barrel |
80.01 |
-2.55% |
Last week saw bullish moves in power and gas despite overall bearish fundamentals in weather and LNG supply. The key supporting factor for this move in power were the bullish moves in carbon contracts, as both UKAs and EUAs have added significant value over the course of the year so far. The key reason for this has seemed to be significant buying activity by hedge funds as they look to close short positions. Weather fundamentals for week 6 have inverted to be supporting of bullish sentiments as wind generation is forecast to average 8.8GW/day, which is 15% below seasonal, and temperatures have fallen from previous forecasts to being back in line with seasonal. These changes in weather fundamentals are expected to result in an increased British gas demand of 50mcm. Due to French strikes last week the UK assumed a net export position along the IFA interconnectors of 1.5GW, despite this activity along the other interconnectors enabled the UK to maintain an overall net import position of 0.7GW. However, with further French strikes planned during week 6 this overall net import position could be challenged, which would likely result in grid running short and potentially having to make active interventions. This is likely to further support prompt contracts which may wash out into the near curves. Europe remains well stocked with gas as storage levels still fractionally above the 70% mark. Norwegian, gas nominations to the UK are expected to increase by 6.2mcm day on day this week. UKAs and EUAs both experienced very bullish weeks up 7.57% and 4.88% respectively, this resulted in both the British power and gas curves being supported during Friday’s session. Crude front month contract experienced a bearish week last week with a gradual day on day decline. The key motivator for this wasn’t demand dynamics but rather the Fed’s most recent interest rate hike in the US. It was the expected 25bps increase and so markets maintained their previous trend as that increase had already been priced in.
Last Week’s Average Generation Stack
Gas |
Wind |
Solar |
Hydro |
Nuclear |
Imports & Exports |
Biomass |
Pumped Storage |
Coal |
|
GW |
8.23 |
14.67 |
1.89 |
0.56 |
4.81 |
4.54 |
2.16 |
0.06 |
0.73 |
% |
21.87 |
38.97 |
5.01 |
1.50 |
12.78 |
12.05 |
5.73 |
0.17 |
1.93 |
This Morning’s View
7 LNG vessels are expected by the 20th of Feb which is 1 more ship that the same period last year.
Wider news
Oil prices edge higher, interest rate outlook limits gains | Reuters
Exclusive: Huge chunk of plants, animals in U.S. at risk of extinction | Reuters
Turkey earthquake: More than 1,000 killed as huge quake rocks Turkey and Syria - BBC News
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