Weekly Energy Market Update - 06/12/2021

6 Dec 2021

Home Weekly Energy Market Update - 06/12/2021

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Jan 22

p/therm

228.90

322.40%

0.62%

UK Gas NBP Summer 22

p/therm

120.24

202.88%

8.32%

UK Gas NBP Winter 22

p/therm

123.43

162.05%

8.42%

UK Power Base Jan 22

£/MWh

295.78

396.61%

2.71%

UK Power Base Summer 22

£/MWh

121.55

156.70%

6.99%

UK Power Base Winter 22

£/MWh

126.73

133.21%

5.95%

Carbon EUA Dec 22

€/tonne

78.64

136.94%

7.55%

Carbon UKA Dec 22

£/tonne

70.10

49.15%

-0.04%

Oil Brent Crude Feb 22

$/barrel

69.88

39.79%

-2.39%

 

Last week saw carbon hit lofty new heights with seasonal gas and power contracts posting strong gains however front month contracts struggled more so. Jan 22 NBP became the new front month gas contract, gapping higher on Monday before spending most days sinking lower to settle just 1.40p/therm higher on the week, a feeble increase considering 16.5p/therm jump on Monday morning at the open as it gapped considerably from the previous Friday’s settlement, feeling full support from taking the spotlight off Dec 21 NBP which expired.

Summer 22 and Winter 22 NBP showcased more established gains, moving 9.24p/therm and 9.59p/therm higher come the end of the week. Gas prices generally felt support from storage worries in Europe remaining and being further compounded by colder forecasts being announced. Moves higher front TTF and even US gas at times helped to prop gas up and provide direction. Whilst mostly following gas, power from even more guidance from carbon which saw Dec 22 EUA’s reach a new high above €80/tonne towards the end of the week. The commodity seems to reach a new milestone every week at this point, often dragging power up with it.

Jan 22 baseload gained virtually in line with its seasonal contracts, managing £7.80/MWh, whilst Summer 22 and Winter 22 baseload rose by £7.94/MWh and £7.12MWh, respectively. Providing bearish pressure to gas and power last week was strong wind output helping to ease pressure on gas burn generation and Gazprom booking day ahead capacity late on Thursday sparked a sell-off in the last hour of trading. Dec 22 EUA’s increased €5.52/tonne by the end of the week, lifting above €80/tonne at times but ultimately settling just below this point on Friday. UKA’s on the other hand struggled to follow, often disassociating from EUA’s which led to the contract ending the week flat, down by just £0.03/tonne as the spread decreases once again. Oil was the main outlier last week with Feb 22 Brent shedding $1.71/barrel of value, giving up the $70/barrel level by the end of the week, a level the contract grappled with all week.

 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

17.27

11.46

0.61

0.68

5.14

2.69

2.78

0.08

1.31

%

41.10

27.27

1.46

1.61

12.24

6.41

6.61

0.19

3.1

 

This Morning's View

This morning has seen gas open below settlement, despite strength elsewhere in the complex, although it is off the lows at time of writing. Jan 22 NBP is down 3.90p/therm currently, but lower wind output today and demand still way above seasonal norms could pull the commodity above settlement, along with stronger carbon and oil. Dec 22 EUA’s have bounded above €80/tonne early on, currently up €1.69/tonne. Feb 22 Brent is up $1.73/barrel, retaking $70/barrel, however Omicron worries remaining will continue to provide counter-balance as the commodity remains volatile and headline driven.

Be notified when we add a new articles