The energy market update for March 2022 is detailed below.
Key Market Drivers: Electricity
Looking at the first half of February, the sentiment was largely bearish.
Primarily, periods of milder weather against seasonal norms suppressed gas-fired power demand. Additionally, we also saw storms Dudley, Eunice and Franklin make landfall in the UK, bringing with it significant wind outturn, softening system margins. As the month progressed, the majority of power contracts took direction from bullish movements in gas prices.
Key Market Drivers: Gas
February represented a relatively volatile period for GB gas prices, in a month of two halves from a price direction point of view. We observed losses across day-ahead and front month contracts, but prices across the board climbed strongly into the months end.
Day-ahead gas prices were 6.9% lower on average than the month previous but did end the month 46% higher than at the start (260p/th), primarily driven by the conflict intensifying in Ukraine.
On average, seasonal gas contracts from summer 22 to summer 24 were 7.9% higher
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