Carbon prices hit fresh highs

 Spot and day ahead prices closed up as temperatures remained well below normal.

As the UK gas system struggled to balance on Monday, prompt gas prices recorded big gains on the day. Wind generation levels below 2GW saw gas-fired power demand push overall demand above 300MCM. An early deficit of 30MCM was cut to 5MCM by close of business but prompt gas prices retained most of the big gains incurred early morning. Spot and day ahead prices closed at 55.25p, up 5.90p and 4.80p respectively as temperatures remained well below normal. The front month led the futures market higher with a gain of 2.28p and prices for the coming 12 months were up by an average of 2.00p.  

 GB baseload power futures recorded substantial gains

GB baseload power futures recorded substantial gains on Monday as gas and carbon prices stepped higher on the day. Near futures gas prices gained almost 5% while carbon prices reached new highs with EU ETS unit prices finishing in a range between €44.40 and €45.40 per tonne. Yesterday’s gains reversed losses incurred towards the end of last week. The day ahead price jumped by £14.00/MWh or 20% day-on-day with tight margins and cold weather still prevailing in Britain. The more immediate cause of the step higher however was the current weakness in wind generation which is forecast to fall below 1GW today.    

Carbon prices hit fresh highs on Monday as EU ETS unit prices gained 83 cents.

Having pushed higher to trade above $64.00 intra-day, Brent crude fell back to close within in the tight trading range it has occupied for the past week. The global benchmark gained 33 cents day-on-day to settle at $63.28 while West Texas was up 40 cents to $59.70 a barrel. The market was concerned by reports of what Iran described as a terrorist attack on its main nuclear processing plant, blaming Israel and vowing retribution. Carbon prices hit fresh highs on Monday as EU ETS unit prices gained 83 cents to finish in a range between €44.40 and €45.40 per tonne.  

 Gas futures have opened marginally lower

Demand on the UK gas system is lower than yesterday with slightly warmer weather today. Low wind generation levels and increased commercial demand has seen the system fall into deficit again in the past hour. Wind generation is contributing less than 1GW this morning, while gas-fired plant is generating 20GW or 55% of GB power demand. The prompt market has yet to trade following yesterday’s step higher and bid-offer spreads are too wide to call any meaningful movement. Gas futures have opened marginally lower and crude oil remains rangebound with negligible change overnight.