November 2021 Energy Market BriefEnergy prices set new record highs over the month

In October, all tracked wholesale GB gas contracts saw strong gains, with the most pronounced growth observed across near-term contracts.

Gas prices across the board remained comfortably above their levels seen at the same time last year, with consistent drivers of low European storage, periods of high gas-for-power demand and strong commodities underpinning this growth in the first half of the month.

On average, seasonal gas contracts from winter 21 to winter 23 were 17.88% higher in October than in the previous month, with prices ending the month 33.0% higher than the start of the month. Summer 22 rose 30.4% to average 112.08p/th, reaching an all-time high on 6 October at 127.99p/th.

Wholesale power contracts remain significantly elevated year-on-year, with seasonal contracts building further on last month’s unprecedented highs, while day-ahead power eased slightly.

Seasonal power contracts up to and including winter 23 moved higher, rising 17.02% on average in October. Summer 22 rose 22.2% to £117.12/MWh, while winter 23 gained 20.0% to £88.80/MWh. The annual October 21 power contract went up 21.4% to average £115.41/MWh

Longer-dated power contracts continue to be supported by their gas counterparts, along with expectations of tight margins throughout the winter season, as forecasted by National Grid ESO in their latest Winter Outlook report.