Prices dropped further on Friday with electricity now below previous lows in late May/early June; gas is getting there and is 117.30 now versus 106.55 on June 2nd.
Our view is that we are entering a 1, possibly 2, week window to renew winter 23 gas contracts as Norwegian maintenance will kick in later this week and typically stops decreases. That said there are very good stocks in Europe currently and the only good news with the current bad weather is that wind production is increasing so may negate the Norwegian disruption. I heard on the BBC earlier that National Grid have announced renewables accounted for 44% of UK electricity production at one point earlier today. This means electricity prices are lower but also that demand for gas is subdued taking pressure off gas prices.
|Gas: Gas prices fell across the curve at the conclusion of last week. Forecasts of high wind pressured the front curve contracts with additional support from storage across Europe being 83% full, leading to a decline in demand for Gas.
Power: Power prices fell last Friday. Wind generation performed at 6.1GWs/day, 20% above seasonal demand. Power prices were also impacted by the declines in the wider energy complex, namely Gas and Carbon. Hartlepool nuclear plant is also due to increase production following an unplanned maintenance period.
Crude: Oil prices may have fell on Friday, but the commodity still managed to end the week higher than it started, for the 5th consecutive week. Gains throughout the week were due to tighter supplies, bullish US economic data and the hopes of the Chinese Government providing a domestic stimulus package.
Carbon (EU ETS): The ICE Dec-23 contract fell to €88.68/t last week. Opening at €88.54/t today, it has since fallen to €88.52/t at the time of writing after experiencing a volatile open, peaking at €89.39/t.
Carbon (UKAs): The ICE Dec-23 contract fell to £46.98/t last Friday. Today the contract opened at £46.8/t and traded slightly above at £46.87/t at the time of writing.