Summary of last months report:
November saw the majority of contracts decline in cost, with the exception of immediate start dates which saw increases as we head into winter. The day ahead price increased dramatically throughout the month as temperatures stayed below seasonal norms, accompanied by low levels of wind generation.
As can be seen below, the month started by continuing the trend of previous months with a continued decline. This trend is driven by increased LNG shipments arriving in the UK with a healthy forecast for more, which is supporting UK storage levels at a 5 year high. Towards the end of the month we saw costs across all contract periods increase as the colder temperatures took hold, this was however tempered by the over supply of LNG.
The below price chart is for annual contracts commencing summer 2020.
Electricity has followed the path created by gas, due to our generation mix still being reliant on gas fired generation. The below chart shows contract prices for summer 2020.
Brent Crude was volatile in November but with a general upward trend. The month opened at c$60bbl and closed at c$63, this represents a 5% increase in the month. The volatility was mainly lead by the ever present US-China trade talks and the prospect of further OPEC cuts. The China – US talks hit a large hurdle when China responded to Trumps support of protests in Hong Kong.