Weekly Energy Market Update - 25/10/2021

25 Oct 2021

Home Weekly Energy Market Update - 25/10/2021

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Nov 21

p/therm

219.22

340.38%

-6.46%

UK Gas NBP Summer 22

p/therm

111.46

180.76%

-0.48%

UK Gas NBP Winter 22

p/therm

114.96

144.07%

-0.04%

UK Power Base Nov 21

£/MWh

209.85

267.71%

-13.58%

UK Power Base Summer 22

£/MWh

111.52

135.53%

-1.67%

UK Power Base Winter 22

£/MWh

114.95

111.54%

-1.50%

Carbon EUA Dec 21

€/tonne

58.27

78.09%

-1.97%

Carbon UKA Dec 21

£/tonne

58.46

29.19%

-3.50%

Oil Brent Crude Dec 21

$/barrel

85.53

69.37%

0.79%

Last week saw gas markets drift lower after an explosive start on Monday. Front-month traded a near 59p/therm range on Monday as the news broke that Gazprom had again failed to book any capacity via Ukraine for the upcoming month and had booked way under the available capacity via Mallnow too. However, given recent Russian tactics, many thought this auction inaction was already priced into the contract, and pricing settled only 3p/therm above the prior day. Tuesday and Wednesday saw dips well bought and the front of the curve moved higher day on day, although the latter days of the week saw sellers brought to the fore and the contract ultimately dropped 15p/therm on the week. Little has changed in terms of fundamentals apart from some calling an end to injection season a multi-year lows as EU nominations switched to net withdrawals last week. Weather will be a key factor in determining price action with an expectation of volatility and sensitivity to any temperature forecast runs showing cooler than previously thought conditions.

The rest of the curve ended the week almost flat with Summer 22 and Winter 22 dropping just 0.54p/therm and 0.05p/therm respectively. Power markets tracked gas, but bearishness was bolstered further by weakness in carbon markets. Front-month, Summer 22, and Winter 22 baseload dropped £32.97/MWh, £1.90/MWh, and £1.74/MWh. Prompt power markets were kept somewhat in check by higher wind output last week with negative pricing and a high in the day-ahead auction of c. £294/MWh, a far cry from the four-figure pricing we saw the prior week. Carbon markets were weaker last week, ultimately failing to recover from a soft first few days of trading as Dec 21 EUAs gave up €1.17/tonne and Dec 21 UKAs dropped £2.12/tonne. The UKA auction last week cleared below where the market was trading once again, but less so than the previous auction, which only partially cleared due to government intervention, which seemed to help buyers gain confidence late in the week. Brent crude markets gained last week with Dec 21 rising $0.67/barrel as fuel switching, from gas or coal to oil where possible, helped to support the demand side alongside OPEC+ continuing to honour supply cuts helped to support the curve. US stockpiles once again saw a week-on-week drawdown as refinery margins remain high. 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

11.08

12.57

1.52

0.60

4.58

3.64

2.42

0.22

0.00

%

30.26

34.31

4.15

1.63

12.52

9.95

6.59

0.60

0.00

This Morning’s View

This morning has seen gas markets once again push higher with front-month up 12.78p/therm and already sitting in the middle of last week’s trading range. The NTS is forecast 2mcm short as beach supplies trend lower from last week whilst power station demand ticks higher with wind output sitting below last week’s average. Day-ahead wind forecasts look healthy, building into the evening peak which could see day-ahead auction pricing somewhat pressured. Dec 21 EUAs are up €1.39/tonne, feeling support from gaining gas, and Dec 21 Brent gains $0.67/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. 


 

Be notified when we add a new articles