WEEKLY ENERGY MARKET UPDATE - 04/04/2022

4 Apr 2022

Home WEEKLY ENERGY MARKET UPDATE - 04/04/2022

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP May 22

p/therm

257.32

68.05%

6.72%

UK Gas NBP Winter 22

p/therm

265.64

56.82%

9.82%

UK Gas NBP Summer 23

p/therm

147.00

83.68%

-0.87%

UK Power Base May 22

£/MWh

220.70

53.71%

5.21%

UK Power Base Winter 22

£/MWh

242.70

50.37%

12.48%

UK Power Base Summer 23

£/MWh

133.16

49.83%

2.20%

Carbon EUA Dec 22

€/tonne

78.49

-1.64%

-0.14%

Carbon UKA Dec 22

£/tonne

75.33

0.98%

-1.80%

Oil Brent Crude Jun 22

$/barrel

104.39

34.49%

-11.06

Last week saw more choppy trading in gas and power markets. The market struggled last week to decide whether or not to believe the progress made in peace talks between Ukraine and Russia. Russia committed to a pull-back of its troops, although had said this previously, along with promising to allow humanitarian corridors out of major cities, before doing precisely the opposite. The market also vied with whether gas flow to Europe would stop at the start of April with Putin decreeing that this was the start date for payment in Roubles despite earlier signals of a phased approach. The decree was also followed by the threat that Russia would not ship gas for free and any deviation from the payment rules would lead to a stop of gas flow. This certainly provided support into Friday, although as Friday came around the flows into Germany looked stable if not a little higher, risk premium was shed from the curve over the course of the day. Front month NBP gained 16.21p/therm on the week whilst Winter 22 gained 23.75p/therm and Summer 23 managed to drop a little. Power markets tracked gas with front month, Winter 22, and Summer 23 gaining £10.93/MWh, £26.93/MWh, and £2.87/MWh. Power markets may have felt some additional support late in the week from continental prices with low French nuclear availability supporting pricing, which culminating in some eyewatering French prompt pricing at c. €3,000/MWh for the morning peak today. Carbon markets continued to bounce around in the current trading range with Dec 22 EUAs seeing rallies above €80/tonne being sold and dips below €76/tonne being bought. Auction weakness last week also helped to cement losses late in the week with record discounts to the secondary markets. Oil markets were especially bearish last week with the Jun22 contract falling $12.98/barrel on the week. Weakness looked linked to Russian/Ukrainian peace talks along with EU sanctions on oil looking less likely. Further pressure came from Biden announcing a release of 1 million barrels-per-day from US strategic reserves over the next six months.


Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

16.98

6.23

3.36

0.19

5.21

2.43

2.03

0.12

1.35

%

44.81

16.43

8.88

0.50

13.74

6.41

5.37

0.31

3.56


This Morning’s View

This morning has seen inch higher with front month NBP up 2.68p/therm as the pullback of Russian troops unveiled supposed war crimes and the German defence minister calls for a ban in the import of Russian gas. The market doesn’t seem to think this is likely however. The NTS is forecast 26.2mcm long despite demand well above seasonal norms as LNG re-gas flow sits at almost 125mcm and power station demand creeps below 50 mcm on high wind. Elsewhere Dec 22 EUAs continue to remain range-bound, currently down €0.69/tonne whilst Jun 22 Brent climbs $0.50/barrel higher as US/Iranian tensions flare around claims of stalling in talks to remove sanctions on Iran.

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