This morning, the Electric wholesale (Day Ahead) prices have opened up 35.89% Higher than this time last week with Gas (Day Ahead) increasing by 29.66%.
Weekly Report
Following a gloomy start to the week, UK gas and electricity curves gained 4-5 percent points.
With diminishing renewable generation putting a greater reliance on gas for both heating demand and electricity generation, the forecast was always for milder temperatures on either side of 20-year norms.
Winter-22, the front half of the annual contract that spent the week gently moving upward, saw the most increases. Increases in the second half of the year, from summer to summer 23, have moderated but are still increasing.
The price of European coal fell by $40/MT [15 percent] in the support fuels complex, whereas the majority of others rose: Brent crude closed 5% higher and LNG 10% higher, boosting carbon pricing by 4.75 percent but still falling short of the €90/Mt target.
This week, Week22, will see June-22 end as the 'front' month, and temperatures are expected to drop substantially below normal from Monday to Friday inclusive. Wind generation is also expected to decline significantly, with solar improvements insufficient to fill any gaps.
Daily Report
NBP Month Ahead and Baseload both closed 5% higher on Friday, with gains less noticeable further down the curve, with annualised Oct-22 NBP up 5.22p/th [2.6 percent] and Baseload £4.85/MWh [2.4 percent], returning to levels last seen in mid-May. Today's trade continues the bullish trend, with Jun-22 NBP up 11.65p/th [7.6%] and W-23 offered at a 5p/th premium. TTF front-month in the Netherlands and Brent crude in the United Kingdom are both up over 1% this morning.
The price of LNG has risen again as a result of China's push to loosen recent lockdown measures, which has aided the global economy and boosted demand. With restrictions already taken back in some major hubs, China's manufacturing data is projected to indicate a small downturn in May.
If a compromise is reached as EU officials meet to discuss a possible Russian oil embargo, crude prices are likely to rise over their two-month high. The group is divided, and any agreement is likely to be softened down, with Hungary being the most obvious holdout. Carbon prices may potentially have a tumultuous week as the G7 energy ministers failed to agree on a 2030 phase-out timeline, and support for a high carbon price has waned. Rates will be influenced by other reforms that will be addressed at a European level throughout the summer.
The prompt is at risk of trading higher as three LNG shipments arrive this week, renewables account for only 17% of the power stack, and the NTS is 2.4mcm short as temperatures linger around 15 degrees maximum through Thursday. The somewhat positive conditions are aided by low wind speeds throughout the week.
How the market has opened each day:
Date Electric (£/MWh) Gas (p/therm)
23/05/2022 139.60 125.10
24/05/2022 121.50 118.00
25/05/2022 111.10 108.00
26/05/2022 79.00 96.10
27/05/2022 166.60 145.10
30/05/2022 181.00 170.00
7 day averages
Electric (£ per MWh) 133.13
Gas (pence per therm) 127.05
The below shows how the market compares to the previous week, month and year.
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