Weekly Energy Market Update - 14/12/2020

14 Dec 2020

Home Weekly Energy Market Update - 14/12/2020

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 20

Change on Week

UK Gas NBP Jan 21

p/therm

46.35

38.36%

11.69%

UK Gas NBP Summer 21

p/therm

37.07

-2.97%

12.32%

UK Gas NBP Winter 21

p/therm

45.43

4.56%

7.53%

UK Power Base Jan 21

£/MWh

56.45

26.97%

4.60%

UK Power Base Summer 21

£/MWh

47.06

10.86%

6.42%

UK Power Base Winter 21

£/MWh

53.04

9.97%

4.84%

Carbon EUA Dec 20

€/tonne

30.52

23.91%

2.01%

Oil Brent Crude Feb 21

$/barrel

49.97

-19.09%

1.50%

Last week saw strong bullish sentiment dominating the energy complex. Gains in the energy mix were led by the NBP curve, with Jan 21 gaining an impressive 4.85p/therm across the week. Later dated Summer 21 and Winter 21 contracts also boasted gains of 4.07p/therm and 3.18p/therm, respectively. These gains were attributed to Norwegian strike tensions which saw up to 50mcm of supply being made offline over the weekend, with threats of further action, prompting prices higher on tight supply margins coupled with heightened uncertainty. Demand during this period has also picked up, rising above seasonal norms which further supported NBP contracts along with strong Asian gas pricing luring LNG cargoes East with JKM posting strong premiums over TTF & NBP contracts. The rally lost some momentum towards the end of the week strikes abated and capacity was restored with no headline news of further strike action.

Relatively low wind generation which averaged 7.2 GW across the week, kept the curve supported against rising temperature forecasts. Temperatures are forecast to be inline with seasonal norms and eventually rise above seasonal norms from mid-December onwards, the front of the NBP curve remains therefore prone to potential downside. UK Baseload tracked gains in NBP with Jan 21 gaining £2.48/MWh whilst the Summer 21 and Winter 21 contracts gained £2.48/MWh and £2.45/MWh. Further upside was capped as markets focused on higher wind generation and temperature forecasts. Dec 20 EUAs gained €0.60/tonne across the week after breaking above €30/tonne, prices have experienced downside pressure from profit taking whilst being supported from a bullish energy complex. Failure to sustain momentum above €30/tonne could see prices fall back below, especially if the energy complex retraces gains this week. Feb 21 Brent gained $0.74/barrel, prices were pressured by rising COVID-19 cases in the U.S., with officials citing lockdown potential whilst vaccine hopes kept prices somewhat afloat. These factors may continue to see sideways actions in oil prices unless inventory data indicates greater petroleum production consumption.  

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

20.00

7.22

1.05

0.65

5.98

2.17

3.10

0.33

2.12

%

46.94

16.94

2.47

1.52

14.04

5.08

7.27

0.76

4.97

 

This Morning’s View

Jan 21 NBP is up 1.02p/therm this morning though wind outturn has jumped to 10GW from last weeks 7GW average, with demand down to 48mcm below seasonal norms. These bearish factors may feed into prompt NBP contracts. Dec 20 EUAs have gained €0.55/tonne with prices breaking above €31/tonne, sustained momentum could see €31.5/tonne being met today. Feb 21 Brent is up $0.41/barrel ahead of the FED’s interest rate decision and policy meeting thereafter this week. 

 

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