Carbon EUAs reversed earlier gains

Prompt close marginally down

Once again, a tight gas system saw prompt and near curve contracts for the NBP rise through the morning on Thursday, but prices fell back later in the session leaving the prompt to close marginally down. There was a compressor issue at the Troll field which curbed supplies as Langeled flows ran at or about 50% of capacity while gas from storage was employed yesterday to bolster supplies, at a time when reinjection would normally be occurring.  Maintenance on the Nord Stream1 pipeline is due to end on Friday and should take some of the pressure off European supplies.  At the close, the spot and day ahead contracts were 0.40p and 0.30p down on the day while futures settled with little change from Wednesday’s close.

  Day ahead contract for baseload power softened

Baseload futures switched tack on Thursday after opening with gains of around £1.00/MWh, near contracts closed an average of £0.70/MWh down.  Carbon EUAs also reversed earlier gains and went on to close an average of 3.3% or €1.78 per tonne down, with the spot closing at €50.18 per tonne the lowest level since 04-June. The day ahead contract for baseload power also softened yesterday as forecasts for wind generation were more positive than Thursday’s performance with 2.0GW expected.  Solar photovoltaic output should remain between 3.3-4.0GW for today.  

Another day of strong gains in the crude oil markets

It was another day of strong gains in the crude oil markets on Thursday as the market continued to rebound following a sharp fall on Monday.  Brent declined by almost five dollars a barrel on Monday as concerns that the surge in Covid-19 cases with the Delta variant could impact demand.  That decline has been recovered over the past three days and Brent is almost flat week on week.  As OPEC+ gets set to increase output by 400,000 barrels per day from August, it’s still not clear if this increase is enough to keep pace with the rising demand as the vaccine push races ahead in the U.S. and Europe.  

 Gas markets have been slow this morning

With wind generation picking up today, GB gas demand is down on yesterday’s levels at 125MCM and supplies are forecast long by 6MCM. The gas markets have been slow this morning with little or no activity on the prompt thus far.  Futures have opened softer but with trading so thin, it’s not clear if the losses will hold up.  Crude oil prices have traded in a tight range with the morning high for Brent at $73.88 and the low at $73.32. The last exchange for the September contract was done at $73.73 a barrel.  Carbon is also trading lower with the Dec-21 contract at €50.27 per tonne.