Another extraordinary day on the gas market
07 July 2021
Major sell off occurred in the middle of the sessionIn another extraordinary day on the gas market, contracts came under price pressure from the offset before a major sell off occurred in the middle of the session. Gas contracts had opened weaker following the strong gains from the previous session and the dam eventually burst with huge losses emerging as the day progressed. The front month August contract shed just under 12% as this contract fell to 83.54p, down by a whopping 9.68p per therm. The September contract posted a loss of 9.60p as it fell to 84.48p per therm. The Winter contract also came under enormous pressure and by close of business was changing hands at 89.51p, down by 9.01p per therm.
GB baseload power futures retreated sharply during Tuesday’s market as it tracked significant losses on the gas and EUA carbon markets. Near term gas contracts tumbled by over 12% despite overall fundamentals remaining more or less the same. The EUA carbon market saw nearly €5.00 per tonne wiped off the price following two weeks of strong gains. The spot carbon contract is now priced at €52.85 per tonne, down by €4.95. The day ahead contract was largely unaffected by the sell off on futures and firmed further on the expectation of lower wind generation availability.
GB baseload power futures retreated sharply
The reverberations of the failure of the OPEC plus group to agree on a way forward on production plans continued across the market during Tuesday’s session. While prices moved higher in the previous the market has clearly changed tack as the carefully constructed consensus that has been built up within the group over the last new of years appears to be on the verge of breaking. At the best of time OPEC was seen as indiscipline as individual producers went their own way on production. The chances of this happening again appear to be gaining momentum and the market has taken a dim view. The Brent crude contract suffered a sell-off during yesterday’s session with the contract shedding $2.63 to close $74.53.
Brent crude contract suffered a sell-off during yesterday’s session