WEEKLY ENERGY MARKET UPDATE - 20/06/2022

20 Jun 2022

Home WEEKLY ENERGY MARKET UPDATE - 20/06/2022

 

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

E&S Desk View

UK Gas NBP Jul 22

p/therm

201.80

31.79%

31.29%

Market likely to remain high as concern over European winter storage levels continue.

UK Gas NBP Winter 22

p/therm

289.97

71.19%

19.70%

UK Gas NBP Summer 23

p/therm

195.70

144.54%

5.79%

UK Power Base Jul 22

£/MWh

198.40

38.18%

22.00%

UK Power Base Winter 22

£/MWh

279.31

73.05%

14.39%

UK Power Base Summer 23

£/MWh

174.37

96.20%

2.76%

Carbon EUA Dec 22

€/tonne

82.37

3.22%

1.02%

Carbon UKA Dec 22

£/tonne

81.35

9.05%

0.18%

Oil Brent Crude Aug 22

$/barrel

113.12

49.16%

-7.48%

Volatility returned last week with big news headlines rocking the energy markets. Monday saw pricing drop as the Bacton interconnector opened back up and exports of gas continued. Tuesday then saw a jump up in prices as announcements overnight that Nord Stream 1 was flowing less gas to Europe due to ongoing maintenance of pipeline turbines. This was followed by early afternoon announcements on Wednesday that Freeport LNG facility would not be fully operational again until the end of the year. Gas and electricity rallied hard on this, July-22 settling at 196.55p/therm and UBL July-22 at £190.44/MWh. Wednesday saw a continuation of the bullish sentiment with further news that Nord Stream 1 volumes would be dropping even further. Front month contracts settling at 245.00p/therm and £231/MWh for NBP and UBL respectively. The market then dropped this value over a volatile 2 days of trading at the end of the week, it traded down on no real change in news. Carbon saw continued volatility as it initially tracked the movements up in gas and power. However, they moved lower on Friday as concerns over a global recession and interest rates increases prompts fears of selling back into the market. Brent Aug-22 contracts started the week increasing in price, testing the $120/barrel mark, before a sell off on Friday dropped $6.30/barrel as fears of decreasing global demand. Renewables remained strong amid warm weather helping to reduce demand for gas to power generation.

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

12.57

6.34

5.41

0.25

6.02

1.64

1.66

0.12

0.08

%

36.87

18.59

15.87

0.73

17.66

4.82

4.86

0.36

0.23

 

This Morning’s View

Gas front month contracts have moved up on the open, NBP July-22 contracts up 18p/therm on Friday’s close. Gas flow to Europe through Ukraine has remained unchanged on Monday morning. Power is expected to follow the moves in gas closely. EUAs and UKAs rise on the open, up €1.6/tonne and £0.60/tonne respectively. Brent futures rise $0.18/barrel on the open as supply concerns outweigh concerns of slowing global economic growth. The NTS is forecast 7.9 mcm long as warm temperatures decrease heating demand.

 

Wider news

UK companies start to track renewables 24/7 to curb greenwashing

Germany announces steps to boost gas storage as Russia cuts supply

Russia becomes China's biggest oil supplier

 

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