Prompt and near futures gas prices gained over a penny per therm

Reports of a partial freeing up of shipping movement in the Suez Canal on Thursday proved unfounded and the strategic shipping route remained blocked. With many oil and LNG cargoes amongst the huge volume of cargoes held up, energy markets responded bullishly again on Friday. Prompt and near futures gas prices gained over a penny per therm and the front month finished 12% higher week-on-week. Heavy losses on the oil market earlier in the week were recovered and Brent crude was little changed from the previous week’s closing position. Carbon prices remain volatile with EUA’s gaining €1.38/tonne on Friday.  

  Crude oil and carbon prices recorded strong gains on Friday

Crude oil and carbon prices recorded strong gains on Friday as the blockage of the Suez Canal continued to fuel bullish sentiment on the energy markets. That sentiment seems transient however as the market veers from concern over sluggish demand to worry that the Suez blockage could be prolonged. The demand issue is compounded by new evidence of rising Covid case numbers in major economies such as the U.S., France and Germany. Brent crude gained $2.62 cancelling Thursday’s loss, but the continuing see-saw price pattern left the global benchmark little changed week-on-week. Carbon prices remain volatile with EUA’s gaining €1.38/tonne on Friday.

 Prompt power products eased on forecast higher wind generation

GB power futures tracked gas and carbon prices higher on Friday with near futures contracts closing almost 5% higher week-on-week. The Suez situation was Gains were sustained right along the curve as carbon price volatility saw EU ETS unit prices rebound to near record levels again on Friday. Despite gas and carbon price increases, prompt power products eased on forecast higher wind generation and lower demand this week. Wind generation hit 12GW on Friday and is forecast to exceed that level today.  

 Carbon price volatility continues

The gas and oil markets are retracing some of Friday’s gains on news of the refloating of the container ship which has been blocking the Suez Canal for the past 5 days. Within day and day ahead gas prices are down by 0.65p and 0.55p while the month ahead has shed 1.79p. Brent crude is down 62 cents. Carbon price volatility continues with EUS’s shedding €1.00 per tonne in early trading. Demand on the UK gas system is running at just 225MCM this morning with temperatures above the seasonal norm and high wind generation levels. Wind is supplying 38% of GB power demand, double the current supply of gas-fired power generation.