Crude oil prices rebounded somewhat with rumours that OPEC is content with current price levels
04 March 2021
The rise in demand was mainly down to a further decline in wind generationThe UK gas system ran between 5 and 10 MCM short yesterday as demand rose to 345MCM, or 50MCM above the seasonal norm. Below normal temperatures drove heating demand higher but the rise in demand was mainly down to a further decline in wind generation which averaged just 1GW as gas-fired generation was required to provide 55% of GB power demand on the day. Despite the system shortfall, within day gas fell by 1.85p and the day ahead contract shed 1.15p. On the futures market, the front month was down by 1.72p and the full Summer 21 contract by 1.12p. Losses on Winter 21 and seasonal contracts beyond were marginal.
Baseload power futures eased on Wednesday as gas and carbon prices fell with the front month down by £1.35/MWh and the full summer contract easing by £0.95/MWh. Carbon prices reversed most of Tuesday’s gains with EU ETS unit prices settling in a range between €37.42 and €38.28 per tonne. Better supply margins on the GB system saw the day ahead price fall back to more normal levels following Tuesday’s spike to £105/MWh. The day ahead settled at £57.90/MWh yesterday as gas and carbon prices eased and despite a paltry contribution of less than 1GW of wind generation yesterday.
Carbon prices reversed most of Tuesday’s gains