UK Power Pricing Trends | 16 April 2021
Short-end power prices in the U.K. were dragged higher last week by a combination of cool weather, weak renewable generation and rallying gas prices. Lacklustre wind generation, in particular, lifted spot pricing to more than 85% above the 5-year average for April. A bullish global backdrop, characterised by stronger oil and coal prices, provided additional support while gains in carbon, supported by the imminent April 30th compliance deadline, underpinned the bullish European landscape.
UK Natural Gas Pricing Trends | 16 April 2021
Average daily wind turbine output fell 80% week-on-week, from 7.5GW to 1.5GW, fuelling a commensurate increase in CCGT generation. Spot pricing rallied amid the weak renewable backdrop, with additional support leant by a 10% week-on-week drop in Norwegian gas flows into the U.K. and a 50% drop in gas storage volumes. A cool and calm outlook fed into short-end futures, which pushed substantially higher, helped on by sharp gains in oil and coal futures and the spot price evolution. Seasonal gas contracts succumbed to the short-end narrative, supported further by gains in key feedstock markets, carbon and the low gas storage levels.
UK Energy Complex | 16 April 2021
It was revealed last week that China’s economy grew at its fastest rate on record throughout Q1 which, in addition to the unprecedented levels of fiscal stimulus in the U.S., continued to support a bullish, global macroeconomic backdrop. This was reflected in global oil benchmarks which pushed more than 5% higher week-on-week. Gains in oil prices fed into international coal markets, with the European benchmark moving almost 8% higher week-on-week, further supported by cold and calm weather across Europe.
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