Energy market summary

Prices experienced severe volatility entering into the summer months, beginning with a sharp increase and eventually falling in-line with decreasing demand. However, this overall decline appears to cease as the summer period draws to a close, with a small increase in prices at the end of August.

 

 

A - The curve climbed strongly at the beginning of June, with a rallying gas market and higher coal prices.

 

B - Gas market volatility propelled the curve up once more after some initial losses. The front winter base-load contract traded as low as £48.60/MWh before climbing to a £51.00/MWh high during the June period. However, sharp losses across the fuels complex weighed on power contracts, with wider system margins pushing the curve down towards the end of the month.

 

C - Following another notable price increase, the curve plummeted in response to sharp gas-market losses. Similarly, coal and carbon significantly weakened during this period.

 

D - Subsequent to an initial peak, weaker gas and coal prices drove down the curve significantly. However, towards the end of the month prices rebounded once more as a result of a further gas market rally.