WEEKLY ENERGY MARKET UPDATE - 21/03/2022

21 Mar 2022

Home WEEKLY ENERGY MARKET UPDATE - 21/03/2022

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP Apr 22

p/therm

246.00

47.29%

-20.92%

UK Gas NBP Summer 22

p/therm

250.32

62.55%

-18.36%

UK Gas NBP Winter 22

p/therm

245.27

51.98%

-15.02%

UK Power Base Apr 22

£/MWh

221.89

27.54%

-17.89%

UK Power Base Summer 22

£/MWh

219.68

48.20%

-15.66%

UK Power Base Winter 22

£/MWh

220.06

36.35%

-12.73%

Carbon EUA Dec 22

€/tonne

78.89

-1.14%

2.77%

Carbon UKA Dec 22

£/tonne

80.91

8.46%

6.46%

Oil Brent Crude May 22

$/barrel

107.93

38.18%

-4.21%


Last week saw gas markets fall further amidst little in the way of extremely bullish news flow from the Russian invasion of Ukraine. This helped markets to fall back towards more fundamental views with gas storage looking healthier, LNG headed towards Europe and cold weather premiums being shed on temperate forecasts. On a technical basis, Monday and Tuesday saw front month gas test 300p/therm and fail both times, a somewhat bearish indicator for the short-term price action. Some, somewhat, bearish news such as Ukraine confirming it could not enter NATO and Zelensky pushing for ceasefire talks also helped pushing pricing lower. Front month gas ended the week down 65p/therm with Summer 22 and Winter 22 dropping 56.30p/therm and 43.40p/therm. However, with markets remaining headline-driven, bullish headlines such as Zelensky refusing an ‘Austrian-type’ deal and lower flow into Germany helped to provide some within-day strength. Power markets tracked gas with front month, Summer 22, and Winter 22 dropping £48.35/MWh, £40.79/MWh, and £32.11/MWh on the week. Carbon markets were stronger last week with Dec 22 EUAs gaining just over €2/tonne whilst their UK counterparts gained close to £5/tonne. Whilst the week shows strength, it’s worth noting that Dec 22 EUAs struggled to convincingly break through €80/tonne several times over the week with sellers hitting the level hard. Dec 22 UKAs rose in a week without auction, but this week’s auction should help to bring some liquidity and sellers to market to temper pricing. Oil markets gave up gains on the week with May 22 dropping $4.74/barrel as the market began to price in improved sentiment around Ukrainian-Russian peace talks, perhaps too soon, as well as a spike in COVID-19 cases in China leading to travel bans and reminding traders of the downside case to oil once again.
 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

12.79

10.10

2.52

0.53

5.69

2.20

1.99

0.24

0.87

%

34.62

27.36

6.81

1.43

15.40

5.96

5.40

0.66

2.35

 

This Morning’s View

This morning has seen gas markets open lower with a lack of bullish headlines over the weekend to stoke things higher. Also helping to add pressure is warmer temperatures and a comfortable system with the NTS forecast 15.4 mcm long was LNG re-gas flow up to c. 94mcm and Beach flows at almost 184mcm. Front month is currently 11p/therm below settlement. Prompt markets could see bids from wind forecast to reach a low of 1GW today, although clement temperatures are helping to supress demand. Elsewhere Dec 22 EUAs are down €0.41/tonne having pushed to a high of €79.74/tonne and failing once again to push higher. May 22 Brent is up close to $5/barrel as the EU posits sanctions on Russian oil and attacks on Saudi oil infrastructure provides support

 

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