Weekly Energy Market Update - 01/09/2020

1 Sep 2020

Home Weekly Energy Market Update - 01/09/2020

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Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 20

Change on Week

UK Gas NBP Oct 20

p/therm

28.95

-13.58%

18.31%

UK Gas NBP Winter 20

p/therm

38.22

-12.04%

7.66%

UK Gas NBP Summer 21

p/therm

34.25

-10.34%

8.56%

UK Power Base Oct 20

£/MWh

43.62

-1.89%

8.89%

UK Power Base Winter 20

£/MWh

51.07

5.89%

6.13%

UK Power Base Summer 21

£/MWh

44.41

4.62%

6.27%

Carbon EUA Dec 20

€/tonne

28.66

16.36%

11.09%

Oil Brent Crude Nov 20

$/barrel

45.28

-26.68%

0.85%

Contracts began the week pushing higher with low wind generation, planned Norwegian maintenance and strong carbon prices helping lift prices along the curve although much of the gains occurring at the prompt and near-term contracts. Additionally, gas prices continued to take direction from Henry Hub with lower supply seen in the U.S. due to tropical storms. The first half of the week saw Sep 20 NBP moved from strength to strength as the contract neared expiry on by Thursday, posting gains of 7% and 5% on Monday and Tuesday. With wind output returning to near norm levels on Wednesday, gains were capped with the contract posting a smaller jump of just under 2%. Price increases were less significant down the curve with Winter 20 and Summer 21 moving closer to 1-2% higher into mid-week. Power prices largely tracked gas with more exaggerated gains towards the front end of the curve however power prices have now lifted above levels seen at the start of the year, pre COVID-19. Oct 20 contracts took over as the front month contract on Thursday which spurred selling off, seeing Oct 20 NBP and baseload lose 1.57p/therm and £0.83/MWh on the day, helped by expectations of greater LNG import over the month due to improved US LNG margins. Contracts along the curve followed suit again although less so. With this said, prices struggled to maintain the bearish moves with Friday seeing most contracts return to strength, more than recouping the losses seen in the day prior, helping the contracts to post marked increases for the week. Carbon returned to strength too, coming within touching distance of €30 once more.

Dec 20 EUAs lifted by €1.68/tonne on Monday, hitting 5-week highs as the contract jumped above €27/tonne. This move was linked to a bullish article in the Financial Times speculating carbon prices could go as high as €40/tonne by 2022. Tuesday saw further bullishness with the contract gaining €0.98/tonne with analysts pointing to support from gas markets as well as spec arms squeezing gains out of a month with reduced supply and low liquidity. Moves upwards calmed by the latter half of the week, with Thursday and Friday seeing slight within day losses. Oil was sideways on the week despite volatility on certain days. Early strength in the Nov 20 Brent contract was attributed to U.S. storms limiting supply due to shutdowns whilst weakness on the latter half of the week was linked to storms causing less damage than originally expected. Nov 20 Brent eventually finished the week up by $0.38/barrel.

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

12.76

7.90

3.82

0.18

3.64

2.19

0.95

0.02

0.65

%

39.73

24.61

11.89

0.56

11.33

6.81

2.97

0.07

2.03

This Morning’s View

Early strength in gas this morning will likely pull power higher on the open. Oct 20 NBP is up 0.90p/therm above settlement whilst Winter 20 NBP follows closely behind, up 0.787p/therm at time of writing. Dec 20 EUAs began the day flat to settlement but have since sold off, currently sitting €0.26/tonne below settlement. Nov 20 Brent is pushing higher this morning with the contract sitting $0.44/barrel above settlement, with further storm damages impeding U.S. production. 
 

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The information provided in this market report is intended for Brook Green Supply Limited clients and subscribers only. The content is provided and intended for general information purposes only. All pricing stated in this market report is indicative, at the time of writing, and may not be attained in trading at any time after report publication. For the avoidance of doubt, Brook Green Supply Limited does not represent or endorse the accuracy or reliability of any of the information or content, expressed or implied, nor are we acting in any capacity as a fiduciary to you. Recipients of this market report must not rely on the information and are advised to take any necessary steps to validate such information, independently assess the economic risks and merits and make your own assessment, or appoint appropriate advisors, on any legal or tax consequences before acting upon it. Under no circumstances will Brook Green Supply Limited have any liability for any loss or damage caused by dependence on any information contained within this market report. Please contact our execution and solutions desk via tradingdesk@brookgreensupply.com for further information.

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