Last Week’s Pricing & Commentary
|
Commodity |
Unit |
Settlement Price |
Change Since 01 Jan 22 |
Change on Week |
E&S Desk View |
|
|
UK Gas NBP Jun 22 |
p/therm |
153.36 |
0.16% |
3.65% |
||
|
UK Gas NBP Winter 22 |
p/therm |
245.52 |
44.95% |
7.21% |
Continued strength as traders look to get into balance prior to June deliveries and weather forecasts provide strength to gas pricing. |
|
|
UK Gas NBP Summer 23 |
p/therm |
174.15 |
117.60% |
3.50% |
||
|
UK Power Base Jun 22 |
£/MWh |
165.61 |
15.34% |
5.34% |
||
|
UK Power Base Winter 22 |
£/MWh |
245.67 |
52.21% |
6.14% |
||
|
UK Power Base Summer 23 |
£/MWh |
163.50 |
83.97% |
3.53% |
||
|
Carbon EUA Dec 22 |
€/tonne |
84.20 |
5.51% |
4.74% |
||
|
Carbon UKA Dec 22 |
£/tonne |
82.19 |
10.17% |
-0.22% |
||
|
Oil Brent Crude July 22 |
$/barrel |
119.43 |
57.48% |
6.11% |
||
Last week saw large trading ranges on gas, carbon and oil as the markets continued their volatility. The NBP finished the week up across the curve as strength on Friday afternoon helped gas to recover some value that was lost in the previous week. June-22 settled the week up 5.40p/therm whilst Winter-22 gained 16.51p/therm. Downward revised weather forecasts have helped to provide support for prompt pricing as temperatures are expected to move closer in line to seasonal norms. UBL contracts closely followed the strength in gas and carbon, June-22 up £8.40/MWh and Winter-22 up £14.20/MWh. Carbon continued its recent volatility and regained some of the losses seen in the previous week. EUAs Dec-22 settled the week up €3.81/tonne whilst UKAs finished down £0.18/tonne as the spread between them closed. The recent volatility can be attributed to a lack of market liquidity and a reduction in supply. Brent saw a rise at the back end of the week, testing the technical barrier of $120/barrel. The oil market has recently gone through a large reconfiguration as Russia’s invasion of Ukraine has caused the EU to push for a Russian oil ban, talks on this are expected to resume today. Wind speed over the week remained high and helped provide >30% of the average generation stack.
Last Week’s Average Generation Stack
|
Gas |
Wind |
Solar |
Hydro |
Nuclear |
Imports & Exports |
Biomass |
Pumped Storage |
Coal |
|
|
GW |
8.94 |
10.62 |
5.34 |
0.27 |
5.14 |
2.63 |
1.18 |
0.00 |
0.00 |
|
% |
26.20 |
31.12 |
15.65 |
0.80 |
15.06 |
7.71 |
3.45 |
0.01 |
0.00 |
This Morning’s View
This morning has started with gas stronger as traders try to get into balance prior to June-22 deliveries. June-22 NBP is up 3.64p/therm and Winter-22 up 2.76p/therm. Strength is also seen in carbon, with UKAs and EUAs Dec-22 contracts are up £0.31/tonne and €0.10/tonne respectively. Brent July-22 contracts open up and move beyond the $120/barrel mark that it had struggled to reach despite strength in recent weeks. The NTS is forecast 3.7mcm short with heating demand, power station and interconnector export all high. Temperatures have out turned below forecasts which has helped to increase demand on the gas grid to above seasonal norms. Wind speeds have dropped off this morning and generation is below 3GW.
Wider news
High gas prices, energy security fears impede decarbonisation push.
G7 seeks decarbonised power systems by 2035.
Israel to renew offshore gas exploration and looks to supply Europe.
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