WEEKLY MARKET ENERGY UPDATE - 04/07/2022

5 Jul 2022

Home WEEKLY MARKET ENERGY UPDATE - 04/07/2022

 

Last Week’s Pricing & Commentary  

 

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

E&S Desk View

UK Gas NBP Aug 22

p/therm

186.84

22.02%

-19.19%

Gas and power markets remain bullish over concerns of winter-22 supply.

UK Gas NBP Winter 22

p/therm

341.11

101.38%

2.50%

UK Gas NBP Summer 23

p/therm

214.69

168.26%

3.60%

UK Power Base Aug 22

£/MWh

207.00

44.17%

-4.31%

UK Power Base Winter 22

£/MWh

314.28

94.72%

0.73%

UK Power Base Summer 23

£/MWh

187.37

110.84%

2.25%

Carbon EUA Dec 22

€/tonne

84.13

5.43%

0.84%

Carbon UKA Dec 22

£/tonne

80.28

7.61%

-0.86%

Oil Brent Crude Sep 22

$/barrel

110.05

45.11%

0.87%

 

Last week saw volatility dominate the energy markets as nervousness persists. Winter-22 and Summer-23 markets remain bullish as supply issues worsen and there is little in the way of bearish factors to mitigate supply interruptions. The week started with concerns of increased Russian aggression in Ukraine and fears of increased NATO involvement in the Ukraine and Russia conflict. The end of the week saw Aug-22 contracts drop value as LNG deliveries to the UK look to remain strong during August. As the UK is currently a net exporter of gas, and with continued threat of supply interruptions from Russia, Winter-22 pricing is expected to stay strong. This resulted in NBP gains of 8.33p/therm and 7.46p/therm for Winter-22 and Summer-23 respectively. Power continues to follow moves seen in gas with no real indicators that this would stop. Aug-22 UBL dropped £9.33/MWh whilst Winter-22 and Summer-23 saw gains of £2.26/MWh and £4.12/MWh. Carbon saw a week on consolidation with relative quiet in comparison to the gas and power markets. EUAs finished the week up €0.70/tonne whilst UKAs finished down £0.70/tonne. Brent continued its volatility as the market battles a tightness in supply and lower OPEC+ output against waning global demand and recession fears.

 

Last Week’s Average Generation Stack

 

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

13.80

7.31

4.78

0.22

5.05

1.35

1.37

0.02

0.31

%

40.34

21.36

13.98

0.64

14.77

3.95

3.99

0.06

0.90

 

This Morning’s View


This morning saw a quiet start before bullish moves in NBP contracts, Aug-22 up 100p/therm. Winter-22 contracts are also up 70p/therm, pushing back above 400p/therm. Causes could be the planned strikes in Norwegian gas terminals which are yet to be resolved. Power has followed the move in gas, Aug-22 UBL pricing at £260/MWh, up £53/MWh. UKAs trade £0.34/tonne lower and EUAs are down €0.51/tonne. The NTS is forecast 1.8mcm short as interconnector export remains very high. Wind generation is up at 12GW as pressure on gas for power generation is eased.

 

Wider news
 

Germany's 15 billion euro credit line for gas might not be enough, regulator warns

Norway strike could cut gas output by 13% next week, oil lobby says

Spain connects 2.9 GW renewables capacity in January-June

 

 

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