WEEKLY ENERGY MARKET UPDATE - 28/02/2022

28 Feb 2022

Home WEEKLY ENERGY MARKET UPDATE - 28/02/2022

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP Apr 22

p/therm

224.61

34.48%

27.12%

UK Gas NBP Summer 22

p/therm

223.84

45.35%

27.20%

UK Gas NBP Winter 22

p/therm

231.74

43.59%

24.92%

UK Power Base Apr 22

£/MWh

199.55

14.70%

16.94%

UK Power Base Summer 22

£/MWh

198.21

33.72%

17.61%

UK Power Base Winter 22

£/MWh

208.77

29.35%

15.52%

Carbon EUA Dec 22

€/tonne

88.14

10.45%

-1.49%

Carbon UKA Dec 22

£/tonne

83.86

12.41%

-4.70%

Oil Brent Crude Apr 22

$/barrel

97.93

25.37%

4.69%

Last week saw gas, power and oil swing violently from Thursday morning after news broke that Russia launched an attack on Ukraine. Mar 22 NBP hit a high print of 285p/therm that morning as the market digested the reality of Russia declaring war on a sovereign state. All eyes focussed on what sanctions would be levied against Russia and the energy market grew fearful that gas flow from Russia into Europe could end. Sanctions looked to cripple the Russian economy whilst Germany pledged to send directly to Ukraine to assist their defence against Russia. Alongside this, companies such as BP looked to divest from Russian state-oil company Rosneft. One thing was certain following Russia’s move against Ukraine, volatility would ensue but ultimately the expectation is that prices are likely to increase. Whilst down from the highs, Summer 22 and Winter 22 NBP rose over 45p/therm over the course of the week whilst baseload power saw gains above £28/MWh from Mar 22 through to Winter 22. Oil swung around 7-year highs, often lifting above $100/barrel but ultimately failed to sustain this level come settlement Friday. Worries persist over supply, linked to Russia/ Ukraine, and helped the Apr 22 Brent contract finish $4.39/barrel higher over the week. Contrastingly, carbon dipped last week with Dec 22 EUAs down €1.33/tonne whilst the comparative UKA contract fell £4.14/tonne.

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

6.52

15.13

3.41

0.80

4.94

3.80

2.43

0.03

1.32

%

16.99

39.42

8.88

2.07

12.88

9.89

6.33

0.08

3.45

 

This Morning’s View

This morning has seen gas and oil lift at the open, sparked by Russia’s continued invasion of Ukraine, further confirmation and commentary over sanctions against Russia and western companies cutting ties with state-owned Russian companies all provide pricing support. Apr 22 NBP, the new front month contract with Mar 22 rolling off, is up 45.07p/therm, with similar gains seen through to Winter 22 as the market reacts following a weekend off to process the Russia/ Ukraine crisis. One aspect all market participants agree on currently is volatility is here to stay with wild swings likely as war continues in Ukraine and the UN and individual countries agree on increasing sanctions against Russia. Power could find some gains capped by weakness in carbon but generally follows the overwhelming strength in gas and oil. Oil jumps higher with worries over supply mounting, see the contract catapult back above $100/tonne again, a level it often rose above last week but ultimately struggled to hold. Apr 22 Brent is up $4.16/barrel at time of writing. Dec 22 EUAs buck the trend and move below settlement this morning, off €5.26/tonne currently with UKAs similarly dropping £2.46/tonne below settlement.

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.

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