Weekly Energy Market Update - 26/10/2020

26 Oct 2020

Home Weekly Energy Market Update - 26/10/2020

To Receive all Market Updates

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 20

Change on Week

UK Gas NBP Nov 20

p/therm

43.62

30.21%

7.04%

UK Gas NBP Summer 21

p/therm

36.46

-4.55%

3.43%

UK Gas NBP Winter 21

p/therm

44.41

2.21%

1.40%

UK Power Base Nov 20

£/MWh

51.02

14.75%

3.20%

UK Power Base Summer 21

£/MWh

44.93

5.84%

2.32%

UK Power Base Winter 21

£/MWh

50.71

5.14%

1.44%

Carbon EUA Dec 20

€/tonne

25.49

3.49%

2.78%

Oil Brent Crude Dec 20

$/barrel

41.77

-32.37%

-2.16%

Last week ended mostly positive for the energy mix, with the exception of oil. Front month Nov 20 NBP was at the forefront, posting a gain of 2.87p/therm, with later dated contracts Summer 21 and Winter 21 posting gains of 1.21p/therm and 0.61p/therm, respectively. NBP prices have been supported by below average temperatures coupled with lower wind outturn, although demand has remained below seasonal norms across the week. An unplanned outage in Norway at the Oseberg field extended into Friday, prompting front month NBP higher. The unpanned outage has restricted 8.5mcm/day worth of gas supply. Power was supported by gains in NBP contracts, UK baseload Nov 20 gained £1.58/MWh followed by Summer 21 gaining £1.02/MWh. Falling temperatures have increased the demand for gas-generated power, further supported by lower wind outturn and low LNG arrivals. Dec 20 EUAs gained €0.69/tonne after prices failed to hold above a key support at €25/tonne and consequently slipped lower.

Elsewhere oil was volatile across the week, Nov 20 Brent slipped $0.92/barrel below settlement as market participants began to doubt any fiscal relief being agreed upon in U.S. congress, in the face of a rampant COVID-19 outbreak and global localised lockdown initiations. A rise in gasoline inventory numbers also suggests lower consumer demand which added further weight to prices.

Last Week’s Average Generation Stack

  Gas Wind Solar Hydro Nuclear Imports & Exports Biomass Pumped Storage Coal
GW 11.24 10.34 1.92 0.71 6.27 3.23 1.97 0.28 0.16
% 31.11 28.62 5.31 1.98 17.36 8.95 5.46 0.77 0.44

This Morning’s View

The energy mix has started the week bearish across the board. Nov 20 NBP is down 0.89p/therm followed by a slip of 0.46p/therm in the Summer 21 contract. Temperatures are forecasted to be 0.5-1.50C above norms with wind outturn to remain on the higher side this week, thus pressuring front month NBP prices. Additionally, stronger expected flows of LNG this week could further weigh on NBP prices. Dec 20 EUAs is down €1.09/tonne, as prices fail to hold above the €25/tonne mark. Prices may retreat towards €24/tonne, before making any noticeable upside attempts. Dec 20 Brent is down $1.03/barrel amid pessimism that a U.S. fiscal stimulus package can be passed before next week’s presidential election. An outbreak in COVID-19 across the U.S has sparked demand fears, further weighing on prices.

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