Carbon EUAs moved up by around 2.0% or 67 cent per tonne yesterday

05 February 2021

The near curve continued to move higher through the afternoon with February peaking at 58.65p

Forecasts for cooler temperatures along with low winds for the start of February spurred on the prompt and near curve on the NBP yesterday. The front month contract, February, which expired on ICE yesterday came out of the blocks with gains of over 2.00p in response to higher prompt prices. The near curve continued to move higher through the afternoon with February peaking at 58.65p before settling at 58.24p, gaining 4.15p on the day. Futures from the summer out closed an average of 0.80p higher. Prompt prices gained between 3.75p and 4.65p yesterday as concerns for a tighter gas system were raised, however, the UK gas system ran with a surplus of 11MCM yesterday.  

Higher carbon EUAs and gas prices supported the GB baseload power curve on Thursday

Higher carbon EUAs and gas prices supported the GB baseload power curve on Thursday. Gains were greater on the near months with February and March adding over £3.00/MWh while contracts from the summer out settled an average of £1.20/MWh higher. Carbon EUAs moved up by around 2.0% or 67 cent per tonne yesterday with the 2021 contract closing at €33.95 per tonne Baseload for the day ahead closed £0.55/MWh up, it was out of step with the NBP prompt gains as wind generation is not expected to ease until the start of February.  

Little change in the crude oil markets again on Thursday as Brent closed 28 cents a barrel down

There was little change in the crude oil markets again on Thursday as Brent closed 28 cents a barrel down while West Texas Intermediate yielded 51 cents. A slightly stronger dollar weighed on the market earlier yesterday, but this flipped later in the session curbing declines on the day. The Chinese government have stated they expect travel during their New Year period to be down by 40% which will be a big dent on demand. Questions on the efficacy of the AstraZeneca vaccine on older age groups from Germany and South Korea along with scheduling delays in Europe have also added to global crude oil demand concerns.  

 The spot has eased by 0.70p in response to the systems comfort

UK gas demand is forecast at 294MCM this morning and supplies are long by 11MCM. UK imports from Norway are 124MCM with Langeled running close to maximum capacity while LNG send out is down at 21MCM. The spot has eased by 0.70p in response to the systems comfort, however, the day ahead and next week products have continued to increase. Early trading on NBP futures has been slow but March, the new front month is slightly down at 54.75p, while longer contracts are closer to last night’s close. Brent is trading near its high point of the morning and is just 26 cents higher at $55.79 a barrel.