22 Nov 2021
Last Week’s Pricing & Commentary
Commodity |
Unit |
Settlement Price |
Change Since 01 Jan 21 |
Change on Week |
UK Gas NBP Dec 21 |
p/therm |
219.51 |
320.84% |
13.12% |
UK Gas NBP Summer 22 |
p/therm |
107.45 |
170.65% |
4.41% |
UK Gas NBP Winter 22 |
p/therm |
110.10 |
133.77% |
4.36% |
UK Power Base Dec 21 |
£/MWh |
223.78 |
287.36% |
21.28% |
UK Power Base Summer 22 |
£/MWh |
109.78 |
131.84% |
6.17% |
UK Power Base Winter 22 |
£/MWh |
112.94 |
107.84% |
6.27% |
Carbon EUA Dec 21 |
€/tonne |
69.36 |
111.98% |
9.63% |
Carbon UKA Dec 21 |
£/tonne |
63.44 |
40.20% |
11.34% |
Oil Brent Crude Jan 22 |
$/barrel |
78.89 |
55.57% |
-3.99% |
Last week saw a bullish start to the week with losses later in the week not enough to stave off weekly gains with front month, Summer 22 and Winter 22 gaining 25.46p/therm, 4.54p/therm, and 4.60p/therm. Gains were linked to temperature forecasts dropping as well as the German regulator halting the Nord Stream 2 certification process because the entity making the application was not a German one. This, and resulting momentum, helped front month to reach a high of 255.65p/therm by mid-week with the market worried once again about gas balances over Winter, cooler temperatures across Europe on the horizon, and growing tensions with Russia around the forces amassing on the Ukrainian border. However, the latter half of the week generally saw losses with attempted moves higher squashed by sellers. Front-month settled c. 36p/therm lower than the high, with little in the way of news helping to move the contract lower. Some were linking weakness to profit-taking whilst others were pointing to the breakthrough of key downside technical targets.
UK power markets were also stronger on the week, outperforming gas at the front of the curve on the back of further supportive strength in carbon. Front-month, Summer 22, and Winter 22 UK base gained £39.26/MWh, £6.38/MWh, and £6.66/MWh on the week. The UK prompt was strong early on in the week with units being called in the BM at pricing in excess of £3,000/MWh, although length in the system was enough to stop this hitting system prices. However, for the rest of the week, the market was kept largely in check by higher wind load factors. Carbon markets were strong last week with EUAs hitting several new highs, as some linked strength to a ‘COP premium’. Dec 21 EUAs finished the week up €6.09/tonne and managed to hold on to gains in the latter half of the week despite falling gas pricing, which should be regarded as bullish. Dec 21 UKAs also had a strong week, gaining £6.46/tonne, helped higher by a strong auction on Wednesday clearing at £59/tonne, largely in line with market pricing. The Brent crude market was the odd one out last week as the Dec 21 contract posted a $3.28/barrel loss on the week. Bearishness came from fears that the US would release strategic reserves and encouraged other large consumers to follow suit to temper pricing, which was further amplified by China appearing to agree to join the strategic reserve selling effort. Also adding pressure was strength in the dollar.
Last Week’s Average Generation Stack
Gas |
Wind |
Solar |
Hydro |
Nuclear |
Imports & Exports |
Biomass |
Pumped Storage |
Coal |
|
GW |
17.91 |
9.29 |
0.24 |
0.59 |
5.63 |
2.60 |
3.01 |
0.83 |
1.09 |
% |
43.49 |
22.55 |
0.59 |
1.43 |
13.66 |
6.32 |
7.30 |
2.01 |
2.66 |
This Morning’s View
Gas markets opened weak before going on to gain with Dec 21 NBP sitting 1.52p/therm above settlement. The NTS is forecast 15.8mcm long despite demand moving to c. 12mcm above seasonal norms as temperatures fall and gas-for-power demand sits above 80 mcm. Dec 21 EUAs have hit fresh highs again trading above €70/tonne whilst Jan 22 Brent climbs by $0.62/barrel.
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.