Weekly Energy Market Update - 29/11/2021

29 Nov 2021

Home Weekly Energy Market Update - 29/11/2021

Last Week’s Pricing & Commentary  

Commodity

Unit

Settlement Price

Change Since 01 Jan 21

Change on Week

UK Gas NBP Dec 21

p/therm

222.08

325.77%

1.17%

UK Gas NBP Summer 22

p/therm

111.00

179.60%

3.31%

UK Gas NBP Winter 22

p/therm

113.84

141.69%

3.39%

UK Power Base Dec 21

£/MWh

245.15

324.36%

9.55%

UK Power Base Summer 22

£/MWh

113.61

139.93%

3.49%

UK Power Base Winter 22

£/MWh

119.61

120.11%

5.91%

Carbon EUA Dec 21

€/tonne

72.78

122.43%

4.93%

Carbon UKA Dec 21

£/tonne

69.25

53.04%

9.16%

Oil Brent Crude Jan 22

$/barrel

72.72

43.40%

-7.82%

Last week saw gas prices push higher overall, with days of strength in the middle of the week helping contracts to post gains, although capped either side by losses with ensured price increases kept in check. Dec 21 NBP sank below settlement at the start of the week, decreasing by 8.34p/therm between settlements, despite stepping higher in the middle of the day. Dropping wind output and colder temperatures putting strain on gas was outweighed by nervousness around resurgent COVID-19 cases in Europe as Austria entered lockdown and Germany reports sharp rises in cases. With so much of the attention this winter on Nord Stream 2, another beast from the east type of scenario in Europe and general European storage levels, COVID-19 has once again reared its head and could force prices lower if restrictions and lockdowns are re-imposed. Gains through the middle of the week looked to be linked to cooler temperatures, a La Nina event being called in the Pacific basin, and headlines around Gazprom shutting supply to Moldova on account of unpaid bills for recent deliveries. Dec 21 NBP ended the week 2.57p/therm higher, with a weak day on Friday helping to keep gains for the week quite modest.

Power, on the other hand, found support from carbon hitting lofty new heights. Dec 21 EUA’s hit a new high of €75.05/tonne although the contract eventually settled off this level by the end of the week. This strength helped to encourage power into gains that outstripped gas. Dec 21 baseload rose £21.37/MWh by the end of the week. The front-season power contracts were tamer, although still stronger than gas, with Summer 22 and Winter 22 baseload gaining £3.83/MWh and £6.67/MWh, respectively. Brent slipped lower last week, finding weakness from the emergence of the newly found Omicron Covid variant which is likely more transmissible than the Delta variant (the current most transmissible variant), and some worries around vaccine efficiency against the new variant. Jan 22 Brent dropped $6.17/barrel on the week, finding some support from the amount of oil released in the Strategic Reserves being called into question along with OPEC+ looking to match their supply cuts in line with this level. 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

17.63

10.53

0.83

0.71

5.49

2.85

2.81

0.51

1.19

%

41.42

24.74

1.95

1.68

12.90

6.70

6.61

1.19

2.80

This Morning’s View

Gas has rocketed this morning, quickly seeing gains of more than 15p/therm through to Q1 22. Dec 21 NBP is up 17.42p/therm with the contract close to expiry and attention due to shift to Jan 22 as it becomes the new front-month contract. Dec 21 EUA’s are up €1.98/tonne above settlement, providing a bullish backdrop for power once it gets going. Brent has found support from some headlines stating vaccines seem to be effective against the Omicron variant, helping ease the worries around economic recovery, and seeing the Jan 22 contract up $3.21/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