WEEKLY ENERGY MARKET UPDATE - 19/04/2022

19 Apr 2022

Home WEEKLY ENERGY MARKET UPDATE - 19/04/2022

 

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP May 22

p/therm

177.25

15.76%

-22.44%

UK Gas NBP Winter 22

p/therm

232.82

37.44%

-10.05%

UK Gas NBP Summer 23

p/therm

181.97

127.38%

6.00%

UK Power Base May 22

£/MWh

170.50

18.75%

-15.30%

UK Power Base Winter 22

£/MWh

222.98

38.15%

-3.90%

UK Power Base Summer 23

£/MWh

159.67

79.67%

4.60%

Carbon EUA Dec 22

€/tonne

79.97

0.21%

-0.15%

Carbon UKA Dec 22

£/tonne

77.90

4.42%

0.19%

Oil Brent Crude Jun 22

$/barrel

113.16

45.79%

10.10%

The week began with the front end of the gas and power curves disassociating with further dated contracts, seeing the front month to front season spread widen. The front of the gas curve came under pressure from warmer temperatures and strong LNG flow as we move further into summer months and the injection season gets underway. Whilst we saw the front of the curve drop lower, further dated contracts generally ticked higher, finding support from further sanctions being proposed or levied against Russia. May 22 NBP ended the week 51.29p/therm below settlement, with losses extending through to Winter 22 NBP which finished 26p/therm lower settlement to settlement. Summer 23 managed to post a positive move on the week, gaining 10.31p/therm between settlements. Power contracts moved in line with gas, seeing losses across the front month and season whilst Summer 23 baseload increased by £7.02/MWh. With prices dropping below the key 200p/therm and £200/MWh levels, traders and analysts will be keeping a close eye on whether further downside can be achieved to bring some sense of normality into prices or whether bids come into the market to lift prices back above 200, a level we’ve typically seen ample support around lately. Carbon end the week virtually flat with Dec 22 EUAs dropping a meagre €0.12/tonne whereas UKAs managed to post a slight gain of £0.15/tonne, keeping the spread between the two counterparts fairly similar. Oil, having recently managed to maintain a level above $100/barrel again, kicked on further to gain $10.38/barrel over the course of the week, finding support from tight supply globally despite restrictions in Shanghai.
 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

11.34

6.66

5.22

0.15

6.19

2.07

1.76

0.03

0.23

%

33.69

19.80

15.50

0.45

18.39

6.16

5.24

0.08

0.68


This Morning’s View

After the long bank holiday weekend gas and oil have opened below settlement whereas EUAs haven’t yet followed UKAs or gas and oil lower, sitting close to settlement currently. May 22 NBP is currently 3.37p/therm below settlement, initially following on from the weakness experienced in the latter half of Thursday’s trading but since finding support around 170p/therm to move back towards settlement. Lower wind output and cooler temperatures forecast could be providing support for gas. Most price action is contained to near-term contracts with later seasonal contracts close to settlement still. Oil has swung around this morning, finding some support from tight supplies and returning demand from Shanghai with restrictions potentially being eased. Jun 22 Brent is down $0.92/barrel at time of writing. Carbon, on the other hand, is mostly flat to settlement this morning, struggling to re-take €80/tonne, but showing positive signs that the contract is comfortable in and around this particular level. Contrastingly, UKAs drop below settlement to see the Dec 22 contract down £0.95/tonne currently, which could pull EUAs lower over the course of the day.  

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