Weekly Energy Market Update - 01/03/2021

1 Mar 2021

Home Weekly Energy Market Update - 01/03/2021

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Apr 21

p/therm

39.79

-18.96%

-1.75%

UK Gas NBP Summer 21

p/therm

38.61

-11.24%

-0.36%

UK Gas NBP Winter 21

p/therm

48.80

-4.97%

0.93%

UK Power Base Apr 21

£/MWh

51.29

-6.34%

-2.21%

UK Power Base Summer 21

£/MWh

49.53

-5.60%

-2.11%

UK Power Base Winter 21

£/MWh

58.68

1.35%

0.24%

Carbon EUA Dec 21

€/tonne

37.28

14.01%

-0.32%

Oil Brent Crude May 21

$/barrel

64.42

25.06%

3.74%

Last week saw gas and power contracts drift mostly sideways in a week that saw Mar 21 contracts expire and Apr 21 take centre stage. Warmer temperatures for the week, through to the weekend, helped dampen contracts early in the week with Mar 21 NBP and baseload dropping 1.29p/therm and £1.28/MWh, respectively. Further helping price softening was a well-balanced NTS with demand some way below seasonal norms and US LNG fears dispersing as feedstock into liquefaction plants lifted back up to 70%. Contracts were then lifted higher into the middle of the week as a mixture of planned and unplanned Norwegian outages reduced flow to the UK, some of which expected to last into March. Further helping to disrupt the supply stack was high wind levels delaying LNG docking at Milford Haven. Contracts along the curve saw day-on-day increases from Tuesday to Wednesday before returning to weakness through to the end of the week.

Front-month contracts eventually settled the week lower, with Apr 21 NBP and baseload dropping by 0.71p/therm and £1.16/MWh. Losses were dispelled further along the curve with Winter 21 contracts ticking slightly higher, rising 0.45p/therm and £0.14/MWh on the week. Dropping wind generation towards the end of the working week led to higher gas demand for power, although this also allowed LNG vessels to finally unload at Milford Haven. Attention will be very much turning to the summer outlook for gas with low storage levels the contract could be relatively well bid during injection season, although a warm and windy summer could ease demand for power. Carbon endured a volatile week, with the story not fully told if only looking at a weekly drop of €0.12/tonne on the Dec 21 EUA contract. The contract touched highs of €39.68/tonne on Thursday before falling off a cliff and dropping a huge €2.40/tonne through to settlement on Friday. It is possible bulls sought to push the contract up to and above the key €40 technical level too quickly whereas data showed recent gains were unsupported by auction prints and investment funds reducing their position. Oil continued its fairly stable weekly gains with May 21 Brent rising $2.32/barrel on the week as output was noted to be slow to recover from the Texas freeze. A surprise build in US inventory, a stronger dollar, and returning Texas production later in the week helped to stifle pricing towards the end of the week but this was not enough to erase the gains posted early on.   
  
Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

12.51

7.09

3.81

0.65

4.28

4.08

2.53

0.04

0.38

%

35.38

20.05

10.78

1.83

12.10

11.54

7.16

0.11

1.06

This Morning’s View

Early strength across the complex sees Apr 21 NBP up 1.01p/therm, Dec 21 EUA’s up €0.59/tonne, and May 21 Brent up $1.24/barrel from settlement. With strength in gas, low wind, and a short NTS, it’s likely power will follow higher over the course of the morning. 
 

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