WEEKLY ENERGY MARKET UPDATE - 03/05/2022

3 May 2022

Home WEEKLY ENERGY MARKET UPDATE - 03/05/2022

 

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP Jun 22

p/therm

163.68

6.90%

-16.66%

UK Gas NBP Winter 22

p/therm

233.78

38.01%

0.51%

UK Gas NBP Summer 23

p/therm

170.24

112.72%

-11.44%

UK Power Base Jun 22

£/MWh

172.21

19.94%

-7.19%

UK Power Base Winter 22

£/MWh

225.39

39.64%

1.80%

UK Power Base Summer 23

£/MWh

158.22

78.03%

-8.02%

Carbon EUA Dec 22

€/tonne

83.04

4.06%

-6.69%

Carbon UKA Dec 22

£/tonne

80.75

8.24%

-2.18%

Oil Brent Crude July 22

$/barrel

107.58

41.85%

1.35%

 

The week began with volatility over the market before generally settling lower over summer months. Commodity markets continue to be driven by headlines amid low liquidity. Extended lock downs in major Chinese cities have helped to reduce demand from Asia. Britain is currently experiencing a glut of LNG imports as interconnector export remains near maximum towards Europe. Britain still has plenty of regasification capacity which means it remains the destination of choice for LNG cargoes. Low wind generation has meant that gas contributed most of the power generation stack all week, averaging >50% of total, at 18.75GW. Front Month June-22 contracts climbed to settle at 204.14p/therm on Wednesday before shedding all its gains and settling at 163.68p/therm on Friday. Power followed the moves seen in gas with liquidity poor. UBL June-22 finishing the week down £13.34 /MWh and Summer-23 down £13.80/MWh. NBP and UBL Winter-22 contracts ended up on the week as traders anticipate tight supply in Britain over next winter. The generation stack showed below norm wind generation as gas had to step in to make up the rest of demand. Increased solar output from sunnier weather meant it contributed >5GW on average. Carbon shed some of the value it had gained on the previous week, Dec-22 EUAs down €5.95/tonne and UKAs down £1.80/tonne. Brent contracts continue to be pulled in both directions as a decrease in Russian oil battle concerns of lock downs in China, it ended the week up $1.43/barrel.

 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

18.75

2.45

5.01

0.13

5.85

0.53

2.13

0.05

0.08

%

53.61

7.02

14.31

0.37

16.73

1.51

6.10

0.13

0.22

 

This Morning’s View

The market continues to battle low liquidity as it opens down. NBP is down across the curve as June-22 drops 9.68p/therm to 154.00p/therm. Power continues to follow the moves that gas makes. Dec-22 EUAs are up nearly 2% to €84.35/tonne. The NTS is forecast short -12.5mcm as interconnector export, gas-for-power generation and heating demand remain high. Wind is continued to be forecast below seasonal norms this week which will increase demand on gas generation. Brent July-22 contracts open flat as early gains on Germany softening their stance on Russian oil is dampened by concerns about global demand.

 

Wider news

EU divided over how to step away from Russia energy.

Enough nickel, lithium to produce 14 million EV’s in 2023 which should speed up the move away from oil.

 

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