Weekly Energy Market Update - 27/04/2020

27 Apr 2020

Home Weekly Energy Market Update - 27/04/2020

Last Week’s Pricing & Commentary

Commodity

Unit

Settlement Price

Change Since 01 Jan 20

Change on Week

UK Gas NBP May 20

p/therm

12.76

-56.35%

-12.60%

UK Gas NBP Winter 20

p/therm

32.06

-26.22%

-5.72%

UK Gas NBP Summer 21

p/therm

28.87

-24.42%

-5.65%

UK Power Base May 20

£/MWh

24.09

-37.02%

-7.67%

UK Power Base Winter 20

£/MWh

41.21

-14.56%

-1.95%

UK Power Base Summer 21

£/MWh

36.51

-13.99%

-4.00%

Carbon EUA Dec 20

€/tonne

20.74

-15.79%

-2.40%

Oil Brent Crude Jun 20

$/barrel

21.44

-66.72%

-23.04%

Last week was largely dominated by oil collapsing early in the week, following on from negative West Texas Intermediate (WTI) prices, whilst volatility in the rest of the energy complex remains. U.S. oil felt immense pressure as the May U.S. WTI contract CLc1 fell into negative territory for the first time in its history which helped bearish sentiment filter into Brent Crude and the rest of the energy complex. The WTI May future contract fell to negative $37.63/barrel, an astonishing loss of $55.90 (306%) on the day as the contract expired meaning physical delivery was required. With storage completely full due to demand destruction caused by covid-19, producers had no other options available to them. The knock-on effect was marked weakness in Brent Crude, the European oil benchmark, with Jun 20 Brent shedding 35% over Monday and Tuesday as the contract dipped below $20 again. The contract bounced back somewhat through to the end of the week to settle above the $20 mark although losses for the week were still a massive c. 23%. Carbon struggled to retrace losses incurred on Tuesday as the Dec 20 EUA contract was pulled back towards the €20 mark, losing €1.51/tonne as the contract was dragged lower by massive in oil and covid 19 impacts. The contract rallied on Wednesday, supported by slight gains in Brent, strength in equities and the release of EDF’s planned nuclear maintenance schedule. However, losses on Thursday and Friday ensured the contract posted an overall loss on the week. 

Gas and power continued their journey lower last week with both commodities posting losses despite some volatility and occasional bullish movement. The prompt and front end of both curves were battered by demand destruction, strong renewable generation and high LNG send out. May 20 NBP and Baseload lost 1.84p/therm and £2.00/MWh on the week with little support to be found anywhere. General trends remained with further dated contracts moving in line with the front of the curve albeit more muted. Summer 21 NBP and Baseload dropped 1.73p/therm and £1.52/MWh on the week.

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

7.02

5.65

8.04

0.11

5.79

1.88

2.26

0.00

0.00

%

22.83

18.38

26.15

0.35

18.84

6.10

7.33

0.00

0.00

This Morning’s View

A quiet start to the week with a mixed opening across the complex. Oil and carbon are pushing lower with Jun 20 Brent and Dec 20 EUAs currently down $0.77/barrel and €0.20/tonne whilst May 20 NBP is up 0.44p/therm to settlement. Cooler temperatures and depressed wind output are forecast this week, which could provide some support for prompt pricing and near-term contracts. The NTS was forecast long, however an unplanned outage of the regasification plant at South Hook has seen supply plummet to around 150 mcm pushing the system significantly short. However, according to REMIT notifications, the unplanned outage is expected to be rectified by 12:00, which may mean support is short-lived should normal outflow levels resume. 
 

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