Weekly Energy Market Update - 04/10/2021

4 Oct 2021

Home Weekly Energy Market Update - 04/10/2021

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Nov 21

p/therm

241.26

384.65%

31.16%

UK Gas NBP Summer 22

p/therm

115.67

191.36%

23.63%

UK Gas NBP Winter 22

p/therm

118.40

151.39%

22.26%

UK Power Base Nov 21

£/MWh

244.48

328.39%

22.67%

UK Power Base Summer 22

£/MWh

119.57

152.53%

18.10%

UK Power Base Winter 22

£/MWh

122.33

125.12%

16.60%

Carbon EUA Dec 21

€/tonne

62.04

89.61%

-1.43%

Carbon UKA Dec 21

£/tonne

73.85

63.20%

14.05%

Oil Brent Crude Dec 21

$/barrel

79.28

56.99%

2.65%

Last week saw the Oct 21 and Winter 21 gas and power contracts expire as we officially entered the shoulder month of October. Nov 21 NBP and baseload gained an eye-watering 57.31p/therm and £45.18/MWh, both lifting above 200p/therm and £200/MWh by some way. To put this into context, the commodity element of a gas and electricity contract for the month of Nov now sits at c. 8.2p/kWh and c. 24.5p/kWh, respectively. Both contracts are up over 300% from their starting point on Jan 21 but this isn’t yet accounting for non-commodity elements of gas and electricity which would see prices higher still. Whilst gains further along the curve were far more muted than front-month contracts or contracts nearing expiry as we entered Oct 21, Summer 22 NBP and baseload still managed to gain 22.10p/therm and £18.33/MWh respectively whilst Winter 22 NBP and baseload achieved gains of 21.56p/therm and £17.42/MWh respectively.

UKA’s posted an impressive gain of £9.10/tonne over the course of the week as EUA’s lagged, losing €0.90/tonne over the week. Tuesday saw the Dec 21 EUA contract plummet and despite some efforts to rebound, the contract ultimately posted a loss. Tuesday’s loss was attributed to investor retrenchment as the reality of tight energy markets globally sunk in for energy-concerned investors. Driver shortages in the UK, meteoric gas prices, concern for northern hemisphere coal stocks, and considerable risk of demand destruction through industrial turn down paint a tricky outlook for this winter. Brent saw the Dec 21 contract become the new front month and, despite some volatility and wider trading ranges, ultimately traded sideways for most of the week. A late rally on Friday helped to cement a gain of $2.05/barrel by settlement Friday but nervousness persists around tight energy supply globally and the looming OPEC+ meeting which seems set on increasing supply into an already finely balanced oil market.  

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

7.88

14.39

3.27

0.36

4.92

1.90

1.98

0.24

0.00

%

22.56

41.19

9.37

1.03

14.08

5.43

5.67

0.68

0.00

This Morning’s View

This morning has seen the gas open in a more subdued manner, initially pushing below settlement before lifting above this point at time of writing. Nov 21 NBP hit a low of 236.48p/therm but is now trading c. 5.74p/therm above settlement as liquidity improves. With wind output dropping from the highs and colder temperatures across the UK, we could see further support for bullish pricing. Carbon has begun the morning strongly, trading above settlement quickly and has surpassed the €64/tonne level on the Dec 21 EUA contract. The contract sits €2.25/tonne above settlement currently. Dec 21 Brent is $0.14/barrel below settlement as the market braces for the OPEC+ supply policy meeting which could see further supply allowed into the market. 
 

Market Report Disclaimer 
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. 
 

Be notified when we add a new articles