Carbon prices returned to record high levels on Monday.

Prompt gas prices recovered some of Friday’s heavy losses

The UK gas system was over-supplied with forecast deliveries running 23MCM long yesterday morning.  A reduction in Langeled flows and LNG send-out from the Isle of Grain saw the system finely balanced at the close.  With lower power demand and a slight pick-up in wind availability, overall demand matched the seasonal norm early on but increased slightly over the course of the day.  Prompt gas prices recovered some of Friday’s heavy losses, within day and day ahead contracts gaining 1.35p and 1.90p respectively.  The May and June contracts also recovered somewhat, but prices beyond July saw a continuation of the decline which started on Friday.

EU ETS unit prices reversed Friday’s minor loss to return to record high levels

GB baseload power futures recovered half of Friday’s steep losses yesterday as gas and carbon prices firmed again on the day.  EU ETS unit prices reversed Friday’s minor loss to return to record high levels as the deadline for 2020 emissions compliance hits at the end of this week and many participants are still purchasing to comply. The day ahead baseload power contract shed £2.25/MWh as wind and solar generation picked up yesterday.  Solar generation peaked at over 5GW, surpassing wind and matching nuclear in the GB generation stack on the day.  

Brent crude eased by 46 cents to settle at $65.65 a barrel

Crude oil prices fell back on Monday with the market torn between the possibility of increasing demand and possible over-supply if OPEC raises production quotas too quickly.  Some easing of restrictions in Western Europe raised the possibility of an increase in demand in this part of the world but the deepening Covid crisis in India, the world’s third largest importer of oil, is likely to result in a decline in demand in the sub-continent.  OPEC meets tomorrow and will have to try to balance any increase in production against the variation in demand in different parts of the world.  Brent crude eased by 46 cents to settle at $65.65 a barrel.  Carbon emissions prices returned to record high levels on Monday.  

A fall-off in renewable generation overnight had little impact as power demand remains subdued

A fall-off in renewable generation overnight has had little impact as power demand remains subdued and overall gas demand is in line with the seasonal norm.  The UK gas system is forecast 8MCM long for today and, while prompt gas contracts have yet to trade, near futures have opened lower this morning.  Norwegian deliveries are somewhat restricted due to maintenance, but LNG send-out remains strong at almost 80MCM.  Crude oil prices have rallied overnight as the market speculates on the outcome of today’s OPEC meeting and the release of weekly inventory data from the U.S. Energy Information Administration.