WEEKLY ENERGY MARKET UPDATE - 25/07/2022

25 Jul 2022

Home WEEKLY ENERGY MARKET UPDATE - 25/07/2022

 

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

E&S Desk View

UK Gas NBP Sep 22

p/therm

344.41

124.93%

16.30%

 

 Volatility to return to the market with

UK Gas NBP Winter 22

p/therm

400.00

136.14%

-0.62%

UK Gas NBP Summer 23

p/therm

290.00

262.36%

6.50%

UK Power Base Sep 22

£/MWh

334.47

132.95%

10.19%

UK Power Base Winter 22

£/MWh

458.13

183.85%

6.89%

UK Power Base Summer 23

£/MWh

247.00

177.93%

5.45%

Carbon EUA Dec 22

€/tonne

76.30

-4.39%

-10.63%

Carbon UKA Dec 22

£/tonne

77.03

3.26%

-7.60%

Oil Brent Crude Sep 22

$/barrel

103.20

36.08%

2.02%

 

Last week saw the continuation of volatility as Nord Stream 1 maintenance came to an end. The market spent the first few days of the week anticipating the outcome of the 10-day Nord Stream 1 annual maintenance. News broke that gas flows were to remain but only at 40% capacity. The famed gas turbine sent over to Canada for maintenance remains in Europe although has not been returned to Gazprom. The outlook for winter continues to look tough, as reduced levels of French nuclear capacity look to add pressure to already tight European power grids. This has been reflected in pricing as winter contracts continue to trade at a significant premium to front month contracts. Friday saw a day of strength, prices rising 16p/therm on Aug-22 contracts and 8p/therm on Winter-22 contracts. NBP front month finished the up 48.27p/therm and Winter-22 down 2.49p/therm. Front month UBL priced up £30.94/MWh and Winter-22 up £29.53/MWh. Carbon saw a week of weakness, EUAs dropping 9.08/tonne and UKAs down 6.34/tonne. Brent gained $2.04/barrel, as the market continues to monitor demand and supply worries. Wind generation picked up over the weekend, contributing over 47% of electricity supply at 10:00 on Sunday 24th of July.

                             

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

12.69

6.89

5.27

0.23

4.79

2.29

2.29

0.08

0.44

%

36.29

19.69

15.06

0.67

13.69

6.56

6.56

0.22

1.27

 

This Morning’s View

 

Gas opens stronger over the winter, continuing the moves seen on Friday. Winter-22 NBP contracts are up 5% to breach the 420p/therm mark. German regulators report that the country is back on track to meet storage targets as withdrawals from storage end and injections restart. Front month Aug-22 contracts fall 2.6%, after Friday’s rally.

Power is expected to follow the moves in gas. Sep-22 Brent contracts are up marginally, pricing at $104/barrel. The NTS is forecast 5.3mcm long as strong wind generation drastically reduces power station demand. Injections into the UK’s short-term storage are also taking place as interconnector export remains near maxed out.

 

Wider news

Germany back on path towards gas storage goals, says network regulator head

France energy: Air-conditioned shops will be told to shut doors to cut waste

National Grid seeks emergency permission to pump more gas to Europe

 

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