WEEKLY ENERGY MARKET UPDATE - 11/04/2022

11 Apr 2022

Home WEEKLY ENERGY MARKET UPDATE - 11/04/2022

 

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP May 22

p/therm

228.54

49.26%

-11.18%

UK Gas NBP Winter 22

p/therm

258.82

52.79%

-2.57%

UK Gas NBP Summer 23

p/therm

171.67

114.50%

16.78%

UK Power Base May 22

£/MWh

201.29

40.19%

-8.79%

UK Power Base Winter 22

£/MWh

232.02

43.75%

-4.40%

UK Power Base Summer 23

£/MWh

152.65

71.77%

14.64%

Carbon EUA Dec 22

€/tonne

80.09

0.36%

2.04%

Carbon UKA Dec 22

£/tonne

77.75

4.22%

3.21%

Oil Brent Crude Jun 22

$/barrel

102.78

32.41%

-1.54%

Last week saw weakness at the front of the curve for gas and power markets with strength at the backend. The market viewed last week with the uncovering of supposed Russian war crimes that had some struggling to see how sanctions couldn’t be extended to Russian energy products, especially gas, against a speech highlighting the reliance on Russian gas by the German Chancellor in his joint speech with Boris Johnson on Friday. Traders seem to be discounting the likelihood of interrupted flow, at least in the near-term, despite a resolution from the European Parliament to ban EU imports of Russian energy products. Front month closed the week down almost 29p/therm although traders also seemingly priced in a longer tail to the Russian invasion and the post-war fallout with Summer 23 gaining almost 25p/therm. Last week has produced an interesting shape to the NBP curve with front month now at a c. 30p/therm discount to Winter 22, but with the Winter 22/Summer 23 spread narrowing a little as the backend moved higher. Power markets took gas as the main signal, shrugging off movements in carbon markets, with front month and Winter 22 dropping £19.41/MWh and £10.68/MWh whilst Summer 23 rallied £19.49/MWh. Dec 22 EUAs tested both extremes of the recent trading range last week in several volatile sessions. Wednesday saw relatively heavy selling over the course of the afternoon to push the contract back down to €77/tonne and early weakness on Thursday dragged the contract down closer to the €76/tonne level. However, Thursday’s auction saw a clearing price at a significant premium to the spot market, which gave the bulls the confidence to pile into the contract and push it to close above €80/tonne on the week. UK carbon also saw gains on the week, finishing £2.42/tonne higher. Brent markets began the week with strength as traders bet on EU sanctions extending to oil, however of the course of the week pressure built significantly. Growing COVID-19 cases in China, strength in the US dollar, and perhaps most importantly, IEA members confirmed a 120-million-barrel release from strategic reserves. The end of the week was spent trying to push higher with analysts warning that the market remains tight despite strategic reserve releases. Jun 22 Brent dropped $1.61/barrel on the week.

 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

11.67

12.15

2.11

0.44

5.23

2.63

1.74

0.22

0.92

%

31.43

32.73

5.69

1.19

14.08

7.09

4.69

0.59

2.49

 

This Morning’s View

This morning has seen gas open lower with front month NBP down 1.54p/therm as it tracks losses in TTF. Amidst a lack of news flow, this is what we would expect to happen with comfortable prompt fundamentals. The NTS is forecast 8.3mcm long with demand falling closer to seasonal norms as temperatures rise a little and wind forecast to rise above 15GW later today, should help to ease prompt gas and power. Dec 22 EUAs failed to hold above €80/tonne, down €0.84/tonne, whilst Jun 22 Brent is down $2.30/barrel as China extends lockdowns.

 

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.

 

 

 

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