CCS Weekly Market Report

 

This week:

 

  • Incredible upwards price movements seen this week

  • Low liquidity in the market due to lack of sellers and fear of the upcoming winter has helped push prices even high 
  • Strong CCGT demand expected to continue through to next week with continued low wind
  • Export at full whack due to price difference with the continent
  • Freeport has withdrawn a force majeure notice it issued in June following the fire.
  • European storage at 73%, on track to meet 80% target by Nov, but rebuild expected to slow down
  • UK storage remain near max

 

  • Low liquidity also pushing up power prices
  • Exports through interconnectors are decreasing, especially to France
  • CCGT is still strong, but wind generation is down
  • Under the government’s worst-case scenario forecast, plans may include short term energy blackouts this January
  • Annual energy bills are forecast to reach £4.2k from January, as the government faces growing pressure to provide further assistance for domestic households.
  • German utility RWE will restart three lignite units from 1 October

 

Brent prices increased this week as IEA increased their oil demand growth forecast by 380k bpd saying that high gas prices will cause some countries to switch from gas to oil. The Southern part of the Druzha pipeline from Russia to Europe was suspended due to unpaid transit fees from Russian apparently due to problems caused by sanctions. OPEC+ output increase by 500k bpd in July, but is still below their target.EUA carbon prices have risen by 3% this week. EUAs closed down on Monday, but have been largely increasing since, with Thursday’s price hitting a 6-week high. Increases are still largely on the back of technical trading given the limited auction availability this month. UKAs are also up, with an auction on Wednesday.Coal prices held flat early in the week, before taking off on Wednesday. The EU and Japanese ban on Russian coal came into effect on the 10th August. South-east Asian buyers are on the side-lines waiting for lower prices, believing it to be a buyer’s market. India's FY21 demand increased by 13.5% y-o-y to exceed 1bn mt. Indian domestic supplies increased 18.5% during the same period to 818m mt.

Posted by Crown Commercial Service Trading Team