WEEKLY ENERGY MARKET REPORT: 29th APRIL 2019
April 29, 2019
Ignite bring you the latest energy news across the UK and Europe. We track and analyse changes in the energy market to keep you informed and up to date. Here’s the latest news from the UK, Europe and the rest of the world.
Last week saw natural gas and power prices in the UK move sideways following the recent highs of last week. The almost-flat, week-to-week, movement in month-ahead prices for both electricity and gas illustrates that the system remained well supplied throughout the week.
On the wider energy commodity complex, the decision of the USA president not to extend waivers on Iranian oil purchases led to $2.50/bbl increase in Brent crude prices during last Monday. Wednesday’s closing was the highest settlement price in six-months, $74.57/bbl. Carbon traded sideways during the previous week between the range of €26.8/t and €27.8/t.
The Pound keeps trading in the €1.15-€1.16 area amid an absence on Brexit news for the time being.
The UK energy market last week
- UK power prices closed the week slightly flat on the prompt contracts whereas the front-curve saw a slight increase. A Similar picture in natural gas, with curve contracts moving by 1.7% on average on the upside.
- Oil benchmark, Brent Crude, reached new highs during last week however the rally ended on Friday when the USA president put pressure to OPEC to raise their output in order to fill in the supply gap.
- Prices opened firmer this morning amid low wind generation and increased levels of demand.
UK Natural Gas prices
British wholesale natural gas prices increased by 1.7% during the previous week. Reduced flows through Easington and cooler weather that raised demand levels have contributed to the week-on-week price increase.
Day-ahead closed at 31.45p/th, 5% lower from last week whereas month-ahead settled at 34.55p/th, a tick up of 0.30% from last week.
In terms of curve contracts, Win-19 settled at 57.45p/th, that is a 1.20% on the upside, week on week, while Sum-20 increased 2.00% during the same period and settled at 47.55p/th.
UK Electricity prices
UK power prices moved upward, driven by the gas market, the recent rally in oil prices and the high carbon prices that traded in the €27/t area.
Day-ahead closed on Friday 6.20% lower on a weekly basis, at £40.90/MWh whereas month-ahead closed the week flat, at £43.00/MWh.
Win-19 contract increased by 1.3%, within-week, before settling at £60.37/MWh on Friday while Sum-20 increased by 1.70% during the same period, at £51.23/MWh on Friday.
The USA economy grew by 3.2% in Q1 2019 thus exceeding the 2% that markets expected. Increases in personal consumption and local government spending were the main factors for the 3.2% GDP growth rate in the first quarter.
What to watch this week
Outlook: Prices are likely to continue trading sideways this week. The UK maintenance is likely to end this week hence supply might become more comfortable. Wind generation is expected to start the week low but is likely to improve as we move towards the weekend as a result of low pressures. Weather forecasts suggest warmer than seasonal normal temperatures for the week.
- Tuesday, April 30: The GfK consumer confidence index for the UK for April is scheduled for an announcement. The index remained unchanged between February and March 2019, at -13 as comfortable numbers from the labour market prevailed against Brexit uncertainty.
- Tuesday, April 30: The BoE’s Monetary Policy Committee will hold a vote on whether to keep interest rates at 0.75%. The decision is scheduled for 12.00pm UK time.
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