Oil prices eased with Brent crude settling 71 cents lower
05 January 2021
With cold weather continuing, demand on the UK gas system remained at similar levels to last weekWith cold weather continuing, demand on the UK gas system remained at similar levels to last week. The sterling rally against the euro on Thursday proved short-lived and the pound was trading at around 1.10 to the euro again on Monday, adding upward pressure to UK gas prices. A cessation of imports via the Bacton-Zeebrugge interconnector early morning left the system forecast 30MCM short. The early supply deficit was largely recovered over the course of the trading day but early gains on the prompt market were sustained with contracts up by between 2.00p and 3.00p. The front month also gained just over 3.00p and prices for the remainder of the year were up by 1.25p day-on-day.
GB baseload power futures gained for a fifth straight sessionGB baseload power futures gained for a fifth straight session on Monday with the new front month February contract up by 10% week-on-week. The February contract was up by £2.25/MWh day-on-day as sterling weakened and carbon prices hit new record highs. EU ETS unit prices gained almost 100 cent to settle between €33.70 and €34.70 per tonne. The day ahead baseload power price pushed higher by £8.00/MWh as supply margins tightened and the day ahead gas price gained 2.90p. Wind generation is forecast lower for today having reached 9GW yesterday.
Carbon prices hit new record highs with prices settling between €33.70 and €34.70 per tonne yesterday. Oil prices eased with Brent crude settling 71 cents lower at $51.09 while West Texas Intermediate was down 88 cents to $48.52 a barrel. New lockdown measures in the UK and many European countries are expected to see further demand destruction through the month of January. Demand in the U.S. is rising however with more traffic returning to the roads, although last week’s data was skewed by people on the move for the Christmas and New Year holidays.
Carbon prices hit new record highs