UK Energy Pricing Trends - 28 May 2021

UK Power Pricing Trends | 28 May 2021

Spot power prices increased last week amid a 40% week-on-week drop in UK wind turbine productivity. Gas-fired generation largely picked up the slack, yet coal plants were still required and were fired up for the first time in 10 days on Friday. Forward prices were a lot more muted in their movements, with seasonal contracts closing the week largely flat. The second consecutive weekly drop in EUA prices, and a noteworthy fall in UKA prices, applied enough pressure to UK forward power contracts to prevent them from posting any significant gains, despite higher coal and oil prices.

UK Natural Gas Pricing Trends | 28 May 2021

Despite a drop in renewable generation output and ongoing maintenance at Norwegian gas fields, UK day-ahead gas pricing pulled back 7% last week amid a 9% drop in local heating demand. Lower spot pricing, as well as an outlook of warm weather for early June, allowed the June gas contract to ease lower into the end of the month. Support remained for quarterly and seasonal futures, however, as the supply outlook remained tight and coal and oil prices pushed notably higher on the week.

UK Energy Complex | 28 May 2021

Global coal prices were lifted higher last week as news broke regarding the halting of operations at a key Colombian mining facility. Moreover, the effect of Indian lockdowns was offset by an increase in coal demand from generators ahead of the monsoon season. Global oil benchmarks pushed higher amid strong economic data out of the U.S. and optimism around Memorial Day weekend travel demand. Further optimism was arguably stoked by the imminent meeting of OPEC+ leaders on the 1st and 2nd of June, with traders betting the cartel would not increase production, despite the strong recovery in oil prices in recent months.

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