Weekly Energy Market Update - 10/05/2021

10 May 2021

Home Weekly Energy Market Update - 10/05/2021

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Jun 21

p/therm

61.23

42.89%

1.64%

UK Gas NBP Winter 21

p/therm

67.94

32.30%

3.13%

UK Gas NBP Summer 22

p/therm

48.12

21.20%

4.03%

UK Power Base Jun 21

£/MWh

69.62

34.19%

-0.09%

UK Power Base Winter 21

£/MWh

78.19

35.04%

2.87%

UK Power Base Summer 22

£/MWh

57.51

21.46%

3.40%

Carbon EUA Dec 21

€/tonne

50.45

54.28%

3.06%

Oil Brent Crude Jul 21

$/barrel

68.28

33.36%

2.37%

Last week generally saw markets trek higher with most contracts posting gains on the week. Gas markets continued to power higher with front month adding 2p/therm by Thursday’s settlement as high winds stopped LNG unloading into Milford Haven and traders continued to eye low gas storage levels. However, Friday’s trading brought losses that helped to trim weekly gains. All of the moves, both up and down, were magnified at the front end with seasonal contracts showing less volatility and larger gains on the week as weakness on Friday in front-month struggled to filter further down the curve. Front-month, Winter 21 and Summer 22 gained 0.99p/therm, 2.07p/therm and 1.87p/therm on the week. Power markets largely moved in line with gas, as well as taking some direction from EUAs. Front-month actually dipped £0.06/MWh on the week thanks to Friday’s sell-off, however, seasonal contracts remained well bid with Winter 21 and Summer 22 gaining £2.18/MWh and £1.89/MWh on the week. Prompt markets continued to be volatile with swings in wind output driving price action, early in the week pricing was kept in check by higher wind load factors before the end of the working week saw load factors drop significantly. System prices above £100/MWh were not at all uncommon from Wednesday through to Friday.

Carbon prices continued to push higher with just one down day last week. Dec 21 EUAs added €1.50/tonne of value through the week and closed above €50/tonne on Friday, a bullish indicator for the coming trading session. Despite meteoric gains, some are still expecting consolidation with a lack of compliance demand and the commodity gaining close to €7/tonne in the last month alone, an upward move of almost 16%. However, fund money continues to pour into the contract, helping to mop up compliance demand with fund positions reaching close to some of the larger generators in the scheme. Brent markets began the week strong, helped by US lockdown measures easing and indications of EU states opening borders for summer. However, the commodity gave back some gains over the midweek despite API and EIA showing strong stockpile drawdowns as COVID-19 cases in India continued to run rampant and aspersions, as to demand recovery, were cast, limiting Jul 21 gains to $1.58/barrel.

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

10.78

11.06

4.19

0.19

4.32

2.81

2.36

0.00

0.26

%

29.96

30.74

11.65

0.53

12.02

7.81

6.55

0.00

0.73

This Morning’s View

This morning has seen the NBP race higher in early trading with front month up 2.4p/therm along with Winter 21 up 2.07p/therm. Strength in gas could be linked to the post-settlement rally seen on Friday and has been spurred on by bullish EUAs with Dec 21 up €1.64/tonne having broken through the €52/tonne level. The NTS is forecast close to 8 mcm long with demand now well below seasonal norms on warmer temperatures and relatively high wind output, which may help prompt gas pricing to ease. Brent markets are grinding higher also with Jul 21 up $0.51/barrel after a series of cyberattacks on Colonial Pipelines in the US sees several key pipelines, feeding almost half of the East Coast’s fuel supply, closed.
 

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