The May 2021 Gas fell 0.7% to 46.86 p/therm last week, with a healthy and consistent LNG supply pushing prices down. LNG send-out looks to have recovered following the clearing of the blockage in the Suez Canal, with 3 deliveries at UK ports on Thursday. Any significant losses were limited by cooler temperatures, providing price support.
The May 2021 Power price climbed 0.7% to £56.64/MWh, lifted by the cooler weather impacting the near-term curve. The near-term curve was also supported by reduced output from renewables, with wind and solar output forecast lower. Gas and power prices were also supported by Carbon prices, which once again reached record highs last week.
The Oct 2021 12 Month Gas price fell by 0.2% to 48.22p/therm, despite European gas storage falling to just over 30%. UK Gas storage also saw significant withdrawals, falling from 47% on 1st April, to 36% by Friday. Output from the North Sea, which fell by around 50% on Friday due to bad weather delaying maintenance, pushed up day-ahead prices but strong LNG deliveries counteracted this.
The Oct 2021 12 Month Power price rose 1% to £58.33/MWh, buoyed on optimism of future demand recovery. The UK’s Covid vaccine rollout has now seen over 32 million people receive their first dose. This week also marks the easing of lockdown rules in England, with hairdressers, gyms and non-essential retail allowed to reopen.
Brent crude oil fell by 2.9% to $62.95/bbl last week as Covid-19 caseloads rise globally. Despite spectators feeling the market lacks any true direction, most eyes fall to the US. The US is being used as a prime example of a semi-vaccinated population reopening their economy. At an “inflection point”, production may see significant increases, and oil demand with it. However, should there be a resurgence in Covid-19 it may spell trouble for the global economy and any hopes of a full recovery by the end of the year. A lack of clear signs of economic recovery will likely weigh on oil prices as the year continues.
Pound Sterling fell 0.9% last week reaching its lowest point for 2 months on Friday. Bearish pressure for Sterling has been linked to the slowing of the administration of the AstraZeneca coronavirus vaccine. As supply issues and concerns related to blood clots arose, leading to a slowing pace of vaccination.
The effects of Brexit in Northern Ireland are also weighing on the Pound as trade barriers between Britain and Northern Ireland have become apparent.
European coal prices fell 2.5% last week as EU Carbon prices hit a record high. Strong wind output for some European countries and Easter holidays lead to a drop in demand for coal-fired power generation.
European carbon hit record highs last week, rising by 2.8% to €43.56/tCO2. This now marks a rise of 40% since EU leaders agreed to tougher targets on cutting emissions in December. Price rises are expected to continue with the EU proposing a further major overhaul of the carbon market in June, designed to cut emissions faster.
Source: BEOND GROUP
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