WEEKLY ENERGY MARKET REPORT: 8th JULY 2019
July 8, 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.
British wholesale power and natural gas markets indicated a firm start for July as Norwegian flows reduced. However, the losses in the carbon market, more than 2% within-week, returned some gains on the curve contracts.
Brent Crude prices fluctuated before settling at $64.23/bbl on Friday, around 1.23% lower on a week to week basis. Last Monday, the OPEC members agreed to continue the oil cuts until March 2020 amid the weakening global economy and the increasing US oil production.
The UK energy market last week
- The British wholesale power market edged lower last week by 0.7% on the curve contracts, on average.
- Gas contracts on the curve softened as imports from Norway slowed down early last week.
- As of this morning, we saw natural gas prices opening higher amid maintenance at a Norwegian gas field and due to an ongoing outage.
UK Natural Gas prices
The British wholesale natural gas curve contracts edged lower by around 0.6% on average from last week. Lower imports from Norway led to the drop in the curve.
Day-ahead closed week at 29.60p/th, that was 11.3% higher from last week while month-ahead settled 12.1% higher from last week at 29.70p/th.
In terms of curve contracts, Win-19 settled at 49.33p/th and Sum-20 at 44.05p/th, a decrease of 0.5% within-week for both contracts respectively.
UK Electricity Prices
Power prices dropped during last week, following the gas curve direction. The drop in price was supported by healthy renewables generation.
Day-ahead increased by 1.1% and closed at £37.40/MWh. Month ahead rose by 4.7% and settled at £40.15/MWh.
Win-19 settled at £54.85/MWh and Sum-20 at £48.26/MWh, a decrease of 0.8% and 0.2% within-week for both contracts respectively.
The USA added 224,000 jobs in June and exceeded market expectations of 160,000. Business services in health care and transportation were the big gainers.
What to watch this week
Outlook: This week we expect renewables generation to remain close to last week’s levels while solar generation might drop. There is potential for an increase in LNG arrivals until the end of July. Currently there is an LNG tanker from Qatar heading to the UK with a capacity of 260k cubic meters.
Wednesday July 10 2019: UK’s Balance of Trade for May will be published. Last month’s trade balance came up to a deficit of £2.74b.
Thursday July 11: The YoY US inflation rate for June will be announced at 12.30pm UK time. May’s inflation rate was 1.8%.
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