WEEKLY ENERGY MARKET UPDATE - 28/03/2022

28 Mar 2022

Home WEEKLY ENERGY MARKET UPDATE - 28/03/2022

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 22

Change on Week

UK Gas NBP Apr 22

p/therm

236.61

41.67%

-3.82%

UK Gas NBP Summer 22

p/therm

244.00

58.44%

-2.53%

UK Gas NBP Winter 22

p/therm

241.89

49.88%

-1.38%

UK Power Base Apr 22

£/MWh

210.13

20.78%

-5.30%

UK Power Base Summer 22

£/MWh

213.79

44.23%

-2.68%

UK Power Base Winter 22

£/MWh

215.77

33.69%

-1.95%

Carbon EUA Dec 22

€/tonne

78.60

-1.50%

-0.37%

Carbon UKA Dec 22

£/tonne

76.71

2.83%

-5.19%

Oil Brent Crude May 22

$/barrel

120.65

54.46%

11.79%


Last week saw energy prices move in tumultuous fashion, something that’s becoming all too familiar for market participants and spectators alike. Despite this, gas began the week timidly, generally easing lower as levels stuck around the pre-Ukraine war trading range. Prices then lifted with growing expectations of EU sanctions on Russian energy products, although this faced staunch opposition from Germany. Putin then stated any “hostile states” will

have to pay in Russian Rubles for any gas bought from Russia. Prices spiked at the news, seeing front month lift above 300p/therm once again before settling back below this level. The week ended with extreme volatility in gas markets with front month NBP showing strength through the first half of the day to push back above 300p/therm briefly before failing to hold the level and being sold over the course of the afternoon. Strength looked linked to fears of chemical weapon use in Ukraine and some desire to test the 300p/therm level, whilst weakness came from a lacklustre set of EU/G8 meetings that failed to see much more in the way of sanctions that may increase the chance of reduced gas flow. Despite highs above 300p/therm, Apr 22 NBP dropped 9.39p/therm on the week with losses consistent across gas and power. Carbon continued to grapple with apparent willingness to test €80/tonne as Dec 22 EUAs eventually lost €0.29/tonne on the week with losses slightly more pronounced for Dec 22 UKA’s. Most losses for EUAs occurred on Wednesday with the expiry of the March options contract which brought sellers to the fore. Oil, on the other hand, increased over $12 on the week to settle just above $120/barrel, a level its recently found itself above on the May 22 Brent contract but struggled to consistently stay above.

 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

15.51

2.29

4.24

0.33

5.38

3.15

1.63

0.25

1.34

%

45.44

6.72

12.44

0.96

15.76

9.24

4.78

0.73

3.91


This Morning’s View

This morning has seen gas and oil dip below settlement at the open this morning, with gas quite tentative whereas oil gives up $120/barrel quite convincingly. Apr 22 NBP is down just 5.61p/therm currently, keeping gas within its pre-Ukraine trading range although traders could look to profit take with the contract nearing expiry as the summer contract season gets underway. May 22 Brent is down $4.52/barrel, giving up $120/barrel immediately as OPEC+ looks likely to increase output in a bid to help settle global energy markets. On the other hand, carbon shifts upwards this morning with Dec 22 EUAs up €0.85/tonne from settlement, moving above €79/tonne with €80/tonne in sight. UKAs move in line with EUAs, seeing the Dec 22 contract move £0.79/tonne higher to keep the UKA/ EUA spread fairly similar.

 

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