Weekly Energy Market Update - 09/08/2021

9 Aug 2021

Home Weekly Energy Market Update - 09/08/2021

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Sep 21

p/therm

108.04

157.85%

4.13%

UK Gas NBP Winter 21

p/therm

109.13

112.52%

5.70%

UK Gas NBP Summer 22

p/therm

66.98

68.72%

10.71%

UK Power Base Sep 21

£/MWh

104.88

105.77%

3.28%

UK Power Base Winter 21

£/MWh

107.24

85.22%

4.56%

UK Power Base Summer 22

£/MWh

73.92

56.12%

11.38%

Carbon EUA Dec 21

€/tonne

56.66

73.17%

6.24%

Carbon UKA Dec 21

£/tonne

48.25

6.63%

9.71%

Oil Brent Crude Oct 21

$/barrel

70.70

38.49%

-6.25%

Last week saw further gains for UK gas with front month touching a high of 111.50p/therm during Friday’s session. The week began with a strong start as the contract opened just over 2.60p/therm above the prior week’s settlement, and although the contract traded lower through Tuesday and Wednesday, bullish price action on Thursday and Friday saw the contract gain just over 4p/therm week to week. Thursday’s strength was linked to a fire breaking out in a condensate plant, which could interrupt flow to Europe. However, the risk to flow was limited and the jump in price does more to highlight the nervousness in the market than anything else. Winter 21 gas posted a gain of 5.89p/therm whilst Summer 22 gained just under 6.50p/therm. Power markets tracked gains in gas and carbon with front month, Winter 21 and Summer 22 gaining £3.33/MWh, £4.68/MWh, and £7.55/MWh week to week.

Carbon markets were also largely bullish last week being pulled higher by strength in gas. Dec 21 EUAs gained €3.33/tonne whilst Dec 21 UKAs gained £4.27/tonne. EUAs remain in their 3-month range, however, are starting to get back to the top end of the range, which could see the all-time highs tested should gas continue to push higher. Last week’s strength in UKAs sees the Dec 21 contract trade a premium again to EUAs in GBP equivalent. Brent markets struggled last week with heavy losses on Monday, Tuesday, and Wednesday. Weakness came from a cocktail of bearish news from low Chinese and US manufacturing numbers early in the week to a surprise build in US crude inventories later in the week. These builds were however paired with heavy draws in gasoline, highlighting strong refinery margins, which should act to draw more crude. The Oct 21 contract dropped $4.71/barrel on the week back to the lower end of the 3-month range. 

Last Week’s Average Generation Stack

<

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

10.10

7.26

3.89

0.15

4.16

4.47

1.97

0.07

0.88

%

30.66

22.02

11.80

0.45

12.62

13.57

5.99

0.22

2.68

This Morning’s View

This morning has seen weakness filter into the UK gas market with front month NBP dropping 0.56p/therm after a quiet start as Dec 21 EUAs also drift €0.19/tonne lower. Given there’s been no change to the underlying fundamentals, it will be interesting to see if traders step into the dip or if after last week’s pace of gains, proves too much to absorb. At the prompt end of the market, the NTS is forecast close to 10 mcm long as demand sits c. 29mcm below seasonal norms despite wind output dropping off significantly, delivering c. 50% less than the same time yesterday. Brent markets continue lower again with the Oct 21 contract down close to $2.40/barrel as Chinese efforts to curb growing COVID-19 cases see traders worried about continued demand recovery. Also acting to suppress pricing is strength in the US dollar.
 

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