Weekly Energy Market Update - 31/01/2022

31 Jan 2022

Home Weekly Energy Market Update - 31/01/2022

 

Last Week’s Pricing & Commentary  

Commodity

 

 

Unit

 

 

Settlement Price

 

 

Change Since 01 Jan 22

 

 

Change on Week

UK Gas NBP Mar 22

p/therm

219.83

31.62%

9.37%

UK Gas NBP Summer 22

p/therm

213.88

38.89%

28.35%

UK Gas NBP Winter 22

p/therm

222.18

37.67%

27.57%

UK Power Base Mar 22

£/MWh

207.64

19.35%

12.90%

UK Power Base Summer 22

£/MWh

195.36

31.79%

21.64%

UK Power Base Winter 22

£/MWh

204.50

26.70%

20.34%

Carbon EUA Dec 22

€/tonne

89.22

11.80%

5.62%

Carbon UKA Dec 22

£/tonne

84.70

13.54%

8.59%

Oil Brent Crude Mar 22

$/barrel

90.03

15.26%

2.43%

Last week saw traders generally buying the dip as Russia/ Ukraine tensions continued to boil, further helping prices tick higher. Front month gas and power saw price increases of c. 18.83p/therm and c. £23.72/MWh settlement to settlement, pulling both contracts further above the 200 mark and ensuring the spread between near-term contracts through to Mar 23 is relatively tight. With this said, low wind at the start of the week helped pull the front month contracts higher but swelling wind output towards the end of the week had the expected opposite effect, keeping these prices volatile. Additionally, this volatility saw system prices display some eye-watering high prints above £4,000 and certain low prints during times of the day when the grid usually experiences the most tightness. It was possible for the spread to narrow between near-term contracts and Mar 23 due to prices further along the curve bouncing higher to bring them in line with the very front of the curve.

Summer 22 and Winter 22 NBP rose by 47.24p/therm and 48.02p/therm whilst the comparative baseload seasonal contracts jumped by £34.75/MWh and £34.57/MWh, seeing the spread between front month contracts and Winter 22 contracts lowered to single digits for gas and power. Carbon began the week lower, finding pressure from equities dropping due to Russia/Ukraine tensions and some weakening of gas and power prices later in the day. Aside from this EUAs and UKAs generally travelled higher, with UKAs displaying particular strength to outstrip gains in EUAs and increase the spread between their European counterpart more so. Dec 22 EUAs rose €4.75/tonne over the course of the week whereas UKAs managed £6.70/tonne. Brent contracts continue to move higher, nearing 7-years highs alongside their most positive month since Feb 21. Mar 22 Brent managed to increase by $2.14/barrel, largely supported by tight supply and political tensions although providing counterbalance are looming Fed rate hikes could weigh on the contract, even after achieving a settlement position above the key $90/barrel level.

 

Last Week’s Average Generation Stack

 

Gas

Wind

Solar

Hydro

Nuclear

Imports & Exports

Biomass

Pumped Storage

Coal

GW

15.89

11.11

1.11

0.52

5.12

3.41

2.82

0.38

1.52

%

37.94

26.53

2.66

1.25

12.21

8.13

6.74

0.91

3.63

 

 

This Morning's View

This morning sees full attention shift to Mar 22 contracts as the new front month as the NBP contracts opens lower, possibly further helped by lower reverse flow and still strong wind output. Mar 22 NBP is down 11.83p/therm, a similar move lower to TTF in percentage terms. Carbon has taken direction from this with Dec 22 EUA’s down €0.34/tonne, dipping below €89/tonne. On the other hand, oil continues its move higher with Mar 22 Brent up $0.94/barrel currently, further cementing its position above the $90/barrel level as it breaches $91/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 afiduciary 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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