Crude oil and carbon prices have eased a little overnight
07 April 2021
Cold weather drove heating demand higherCold weather drove heating demand higher but strong wind generation levels kept gas-fired power demand subdued. In fact, wind topped the generation stack on Tuesday. The UK gas system ran in surplus throughout the trading day as supply was bolstered by high levels of storage withdrawals. While storage would normally be replenishing at this time, the strong price increases of the past 2 weeks and Tuesday’s spot prices, lured storage holders to sell. The recent upward momentum on the gas market intensified on Tuesday as oil and carbon prices recorded strong gains on the day. Despite the healthy supply-demand situation, prompt gas prices still recorded gains averaging 2.50p and prices for the next 12 months averaged gains of 1.58p.
GB power futures recorded strong gains on Tuesday as gas prices strengthened and carbon prices hit record highs. EU ETS unit prices gained €1.80 per tonne, finishing in a range between €44.14 and €45.10 per tonne. Baseload power futures for the next 12 months gained an average of £1.65/MWh on the day. The day ahead baseload contract for Tuesday gained £6.00/MWh as temperatures remain below normal. Wind generation increased and topped the generation stack on Tuesday. The Brit-Ned interconnector remained off-line and is not expected to return to service until April 22.
Carbon prices hit record highs