WEEKLY MARKET ENERGY UPDATE - 11/07/2022

11 Jul 2022

Home WEEKLY MARKET ENERGY UPDATE - 11/07/2022

 

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

255.52

66.88%

-9.47%

The market awaits news of Nordstream 1 maintenance as annual maintenance begins.

UK Gas NBP Winter 22

p/therm

436.10

157.45%

6.02%

UK Gas NBP Summer 23

p/therm

305.75

282.04%

19.82%

UK Power Base Aug 22

£/MWh

248.39

73.00%

-5.39%

UK Power Base Winter 22

£/MWh

412.93

155.84%

9.78%

UK Power Base Summer 23

£/MWh

253.03

184.72%

15.04%

Carbon EUA Dec 22

€/tonne

82.79

3.75%

-2.08%

Carbon UKA Dec 22

£/tonne

81.50

9.25%

-4.54%

Oil Brent Crude Sep 22

$/barrel

107.02

41.11%

-5.71%

 

Last week saw the market become increasingly nervous as the political tensions over gas supply to Europe ramped up. Liquidity remains incredibly poor as traders remained nervous of being caught the wrong side of news. Electricity continued to follow the moves in gas closely, something that seems unlikely to change in the short term. Monday saw the market rally hard, with Winter-22 hitting a new high of 416p/therm. Moves seemed to be driven around fears of Norwegian oil and gas workers striking on the Wednesday. Tuesday saw a similar with a strong rally in the morning, Winter-22 NBP hitting a new high of 434p/therm. An afternoon sell-off saw value shed as the Norwegian government stepped in to end workers strikes. The later stages of the week saw the market rally as nerves increase ahead of Nordstream 1 maintenance. The market has now reached levels where we would expect to see demand destruction across consumers which may provide relief this winter. The end of the week saw Aug-22 NBP drop 23% as Canada hinted it may return gas turbines to get Nordstream1 back up to 100% capacity. Aug-22 NBP settled the week down 26.72p/therm, with Winter-22 up 24.78p/therm and Summer-23 up 50.57p/therm. Power followed closely, Aug-22 down £14.16/MWh, Winter-22 up £36.78/MWh and Summer-23 up £33.09/MWh. Carbon saw weakness over the week, EUAs Dec-22 down 1.76/tonne and UKAs down £3.88/tonne. Brent saw a big weekly drop as global recession fears prompted concern over demand. Wind generation remained intermittent reaching highs of >15GW on Wednesday to lows of 1.5GW on Sunday.

 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

11.68

7.24

6.96

0.12

4.68

2.46

1.92

0.01

0.30

%

33.02

20.46

19.67

0.35

13.24

6.96

5.42

0.04

0.85

 

This Morning’s View

Gas drops on the open as Nordstream 1 is due to enter its 10-day annual maintenance. Yesterday saw Canada announce it would return the repaired Gas turbine which has been the centre of recent tensions. The market awaits news of the pipeline returning to action as it fears Russia may extend maintenance to increase European energy insecurity. Oil drops $2.50/barrel as concerns grow over mass covid testing in China may impact demand. EUAs climb €0.23/tonne on the open. The NTS is forecast 2.4mcm long as wind generation drops to <1.5GW placing pressure on gas for power generation.

 

Wider news

 

Ships get older and slower as emissions rules bite

Russian gas flows to Europe drop 60% as NS1 works begin

Price of offshore wind power falls to cheapest ever level in UK

 

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