EUA carbon contracts have firmed this morning

UK NBP seemed to pause and gave up a small proportion of the premium

Following the extraordinary surge in European markets on Monday the UK NBP seemed to pause and gave up a small proportion of the premium amassed in the previous session.  The market opened softer initially and oscillated between losses and a flat market over the day.  The front month September contract fell to a low of 115.46p and reached a high of 119.26p at one stage.  This contract eventually finished at 116.65p shedding 2.41p in the process.  At any other time, this would be perceived as a significant loss but given the markets elevated position it was not that remarkable.  Losses on the Winter 2021 contract came in at 2.21p as this contract settled at 120.12p per therm.

GB baseload power contracts went lower in yesterday’s session

Having risen to record levels in the previous session GB baseload power contracts went lower in yesterday’s session although in comparison to recent rises the correction was modest.  Overall fundamentals remain unchanged from recent times although on the day the minimum supply margin did expand compared to recent sessions. The front month September baseload contract shed £1.63 as this contract settled at £111.12/MWh.  The baseload spot price firmed a little to £105.75/MWh as a lower forecast for wind generation is likely to lead to greater demand for gas generation.

Crude oil prices went lower for the fourth session

Crude oil prices went lower for the fourth session in a row as the market failed to shake off the negative sentiment around global economic activity.  Even the takeover of Afghanistan by the Taliban failed to provide any upward momentum for crude oil prices.  Under normal circumstances an calamitous event such as that would drive premium into crude oil markets.  The clear focus remains on the poor economic data out of China and the prospect of a further economic downturn as both Australia and New Zealand report new Covid outbreaks.  At market settlement, the Brent crude contract finished at $69.03 per barrel. 48 cents lower than the previous session  

The gas market is pushing higher once again

The gas market is pushing higher once again this morning with contracts opening firmer from the outset.  The front month September contract is up by 1.45p and is now priced at 118.10p per therm on the ICE platform.  Other contracts out to December 2021 have added similar amount as the market seeks to recover the losses from yesterday.  Forecast demand for today is running 152MCM more or less on par with yesterday’s levels.  The gas system is displaying a small deficit of 5MCM at the moment as supplies lag behind.  EUA carbon contracts have firmed by with the spot up by 61cents at €57.85 per tonne.  Crude oil markets are also up as Brent trades at $69.60 a barrel.