Carbon prices hit new record highs of over €35.00 per tonne

 Day ahead gas also saw some stepped movement over the week

The highly volatile trading pattern over the 5 days saw losses and gains on the front month contract of over 5.00p last week and a week-on-week increase 4.29p. Sub-zero temperatures and high gas-fired power generation demand stretched the UK gas system balance at times through the week. Day ahead gas also saw some stepped movement over the week, gaining 4.40p to finish above the 60.00p mark for the first time in almost 2 years. Movement on seasonal contracts was less dramatic with the front summer and Winter 21 contracts gaining just over penny week-on-week.  

GB power futures on the near curve moved higher in line with rising gas and carbon prices on Friday

GB power futures on the near curve moved higher in line with rising gas and carbon prices on Friday. The front month gained £2.60/MWh to settle just above £70.00/MWh. Summer 21 was up marginally while seasonal contracts further out the curve were unchanged or down marginally. Carbon prices hit new record highs of over €35.00 per tonne. Supply margins remained tight with temperatures around zero and weak wind generation levels which continued to support prompt power prices on Friday. Forecast lower demand and increased wind generation levels for this week saw the day ahead contract price ease slightly.  

  Brent crude finished above $55.00 for the first time in over 10 months

Crude oil prices recorded steady gains throughout the week and Brent crude finished above $55.00 for the first time in over 10 months. OPEC’s decision to maintain current production quotas, along with the Saudi Arabia’s unilateral plan to cut output, and a big weekly decline in US oil inventories all helped support oil prices. The U.S. crude oil benchmark, West Texas Intermediate, gained $1.41 to settle at $52.24 a barrel, which was also a 10-month high. The market will be watching the next inventory report from the U.S. to determine if the previous week’s steep decline in stocks will be repeated or whether the dip was down to holiday driving demand.  

Prompt and near futures gas prices have risen further this morning

Rising temperatures and strong wind availability have seen demand on the UK gas system dropping to normal levels for this time of year. Overall demand is forecast at 320MCM and the system is currently forecast 11MCM long. Despite the improved supply-demand situation, prompt and near futures gas prices have risen further this morning. The spot price is up by 1.70p while the front month has gained 2.70p. This comes as crude oil prices are easing for the first time in in a week. Brent crude is down by 59 cents to $55.40 a barrel in latest trades this morning.