Weekly Energy Market Update - 22/03/2021

22 Mar 2021

Home Weekly Energy Market Update - 22/03/2021

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Apr 21

p/therm

43.10

-12.22%

-7.31%

UK Gas NBP Summer 21

p/therm

42.05

-3.33%

-6.35%

UK Gas NBP Winter 21

p/therm

52.33

1.91%

-5.29%

UK Power Base Apr 21

£/MWh

54.60

-0.29%

-5.41%

UK Power Base Summer 21

£/MWh

53.65

2.25%

-4.37%

UK Power Base Winter 21

£/MWh

63.81

10.21%

-2.58%

Carbon EUA Dec 21

€/tonne

41.97

28.35%

-2.05%

Oil Brent Crude May 21

$/barrel

64.53

25.28%

-6.59%

Contracts tumbled across the energy complex last week, despite carbon proving volatile and dragging gas and power pricing with it multiple times across the week. A mixture of a warmer weather forecast increased LNG flows, and falling carbon prices helped both gas and power lower at the start of the week, with marked weakness at the front end of the curve. Apr 21 NBP and baseload dropped 1.21p/therm and £1.27/MWh, whilst carbon rejected levels above €43/tonne as the Dec 21 EUA posted a new high of €43.36/tonne before retracting, falling back to settle €0.46/tonne below settlement on the day. The contract did eventually pull back above this high, to post a refreshed new all-time high (something that is becoming the norm lately) of €43.77/tonne. The contract was helped by an auction clearing at close to value and spec money betting on gains, however, profit-taking, and tanking oil contracts reversed price action in the afternoon to ensure the contract ended the week softly, finishing €0.88/tonne lower by Friday. Gas and power largely followed carbon price action, even with warmer weather forecasts, LNG sendout, and weak oil applying pressure at times. Contracts along the curve posted losses, Apr 21 NBP and baseload plummeted 3.40p/therm and £3.12/MWh by the end of the week. Summer 21 and Winter 21 NBP managed to post similar losses of 2.85p/therm and 2.92p/therm whereas power moved in line, shedding £2.45/MWh and £1.69/MWh on the Summer 21 and Winter 21 baseload contracts.

Oil prices suffered drastic losses last week after recent strength linked to demand recovery and generally positive fundamentals propped up prices to around $70/barrel. May 21 Brent returned to weakness as further European countries began to raise concerns with the Oxford- Astra Zeneca vaccine and reports of blood clots, causing countries to halt vaccine rollout from this provider, stemming demand recovery timelines. WHO ultimately backed the vaccine and further research showed the number of blood clots reported were in line with the usual number of blood clots reported in the general population but rising COVID cases in many European countries led to further lockdown measures likely being implemented. This further hindered demand recovery expectations, seeing the May 21 Brent contract post a loss of $4.55/barrel on the week. 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

15.65

7.19

3.27

0.43

4.84

2.10

2.64

0.01

0.33

%

42.93

19.72

8.98

1.18

13.27

5.75

7.24

0.04

0.90

This Morning’s View

The NTS was forecast to open c. 5.9mcm but this level is reducing, bringing the system closely balanced, which could provide further strength pricing which is already seeing support from low wind levels. Apr 21 NBP is up 0.70p/therm although little has traded further along the curve. Dec 21 EUAs are up €0.20/tonne after a slow start, likely spurred on by the quick jump from gas pricing. Brent continues lower with lockdown measures being implemented in certain European countries. The May 21 Brent contract has dropped $0.40/barrel below settlement. 
 

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. 
 

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