Highest recorded price this year for carbon beating the previous record by 1.00 cent.

03 February 2021

The UK NBP market was much more stable during trading on Tuesday.

Following the previous session of sharp losses, the UK NBP market was much more stable during trading on Tuesday.  We have become used to large rises and falls in prices in recent time but yesterday proved to more modest as contracts did not stray too far from previous closing positions.  Following the previous session’s loss of just under 5.00p, the front month March contract opened 0.25p higher.  This premium grew to just 0.40p with the contract settling at 48.64p.  This modest movement was reflected on the remainder of the curve where contracts failed to recover the previous session’s losses and added just 0.30p on average.  

 Strong gains on the EUA carbon market

GB baseload power contracts recovered some premium yesterday following the sharp losses from the previous session.  The recovery on the front month was minimal with March only gaining by £0.25 as the contract settled at £56.90/MWh.  Gains for April and the Q2 2021 contract were more substantial and came in at £1.25 and £1.00 respectively. While gas played a role in the uplift in prices, strong gains on the EUA carbon market also fed into the mix.  At market close EUAs for 2021 had risen by €2.05 to close at €34.97 a tonne.  

Crude oil markets finished at their highest point since January 2020

The rally on crude oil markets continued on Tuesday with contracts posting gains for the third session in a row.  While gains in the previous two session had been modest enough, the market yesterday was more actively traded and contracts opened the session with gains of almost a dollar.  These gains were extended during the rest of the day and at one stage the Brent crude contract was up by $1.70. The market is once again focused on production levels and with U.S. output at standstill for 11 straights and OPEC led production cuts, crude oil markets finished at their highest point since January 2020. this is the highest recorded price this year for carbon beating the previous record by 1.00 cent.  

EUA contracts are on the move up again this morning

UK NBP gas prices are under pressure once again this morning with weakness once again evident at the front of the curve.  The front month March contract has already shed over 2.00p as the sell off for this period continues apace.  The cumulative loss for this contract over the last four session is over 8.50p.  The April contract is down by over a penny so far and Summer 2021 has shed 0.77p.  Other contracts on the curve have yet to trade but bid/offer spreads would suggest similar downward pressure for these periods. Following yesterday’s increases carbon, EUA contracts are on the move up again this morning with €2.00 added across the board.  Brent is priced at $58.00, up by $0.54 a barrel.