Last Week’s Pricing & Commentary
|
Commodity |
Unit |
Settlement Price |
Change Since 01 Jan 23 |
Change on Day |
E&S Desk View |
|
UK Gas NBP Feb 23 |
p/therm |
168.90 |
-1.33% |
10.74% |
Markets saw their first aggressive price increase of the year on Friday…resulting from cold weather and a need to remain competitive in the LNG spot market |
|
UK Gas NBP Summer 23 |
p/therm |
173.28 |
-8.66% |
10.12% |
|
|
UK Gas NBP Winter 23 |
p/therm |
197.33 |
-8.13% |
8.23% |
|
|
UK Power Base Feb 23 |
£/MWh |
163.89 |
-12.00% |
4.03% |
|
|
UK Power Base Summer 23 |
£/MWh |
163.78 |
-14.41% |
6.95% |
|
|
UK Power Base Winter 23 |
£/MWh |
193.34 |
-13.31% |
6.69% |
|
|
Carbon EUA Dec 23 |
€/tonne |
85.08 |
1.81% |
1.41% |
|
|
Carbon UKA Dec 23 |
£/tonne |
68.18 |
-3.61% |
-1.25% |
|
|
Oil Brent Crude Mar 23 |
$/barrel |
87.63 |
6.74% |
1.71% |
Last week saw the market begin to be laced with short term bullish sentiment as low wind generation and cold temperatures helped to support gas demand across Europe. Weather forecasts and LNG signals continue to the driving force for movements in markets. Europe remains well stocked with gas as storage levels remain at around the 80% mark. Attention has now turned to the summer injection period with the market attempting to price in the need to attract LNG flows whilst assessing where European gas levels will be by the end of winter. Below seasonal wind generation in the UK has helped to support prompt and forward curves down with Feb-23 NBP and UBL gaining 10.74% and 4.03% over the course of Friday’s session. Summer contracts were also supported at the end of last week, gaining 10.12% in gas and 6.95% in power respectively. This is being eased slightly due to the fact that the UK is retaining its net import position across power interconnectors, particularly from France have due to the fact that as their nuclear generation ramps up, following the well-documented maintenance issues experienced pre-Christmas, peak prices will in turn drop. UKAs and EUAs spreads grew last week as EUAs added 1.41% to their cost per tonne whilst UKAs dropped 1.25% per tonne in value. After a few weeks of bearish moves, Brent saw bulls return to the market as demand from China grew rapidly on the opening of the economy after covid-19 restrictions were relaxed by government.
Last Week’s Average Generation Stack
|
Gas |
Wind |
Solar |
Hydro |
Nuclear |
Imports & Exports |
Biomass |
Pumped Storage |
Coal |
|
|
GW |
18.51 |
9.56 |
2.85 |
0.52 |
4.83 |
3.10 |
2.15 |
0.08 |
0.97 |
|
% |
43.49 |
22.45 |
6.70 |
1.21 |
11.34 |
7.28 |
5.06 |
0.18 |
2.28 |
This Morning’s View
The UK is at the start of a mini cold spell, with temperatures dropping and gas demand increasing. However, the market is bearish this morning with Feb-23 and Winter-23 NBP contracts moving 4% down from their Friday settlement prices.
Wider news
Physical oil market starts year with a rally on China demand, Russia sanctions | Reuters
Gascade and Fluxys step up plans for North Sea hydrogen pipeline | Reuters
Ukraine war: Germany won't block export of its Leopard 2 tanks, foreign minister says - BBC News
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