Oil prices have eased as Hurricane Ida moved inland

The September contract expired on Friday at a record high

An extension of the unplanned outage at the Nyhamna field until Tuesday and further planned maintenance on Norwegian facilities through September increased concern for short-term supply on Friday.  The concern for near term gas supply was exacerbated by a 5% rise in EU carbon prices which pushed EU ETS unit prices to new record highs of over €60.00 per tonne.   The September contract expired on Friday at a record high of 120.97p, having gained over 16.00p over the course of the week.  Prices for the winter months gained almost 15% week-on-week.  Prompt gas prices recorded gains of between 3.40p and 4.00p despite a comfortably supplied system on the day.

EU ETS unit prices record new highs

GB baseload power contracts for the coming 6 months took another step higher on Friday as emissions prices moved to record high levels.  EU ETS unit prices hit the €60.00 mark to record new highs and, coupled with gains on the wider energy complex UK power prices for the front month, quarter and season, all settled at new record highs. The day ahead power price jumped by £8.00/MWh to £118.45 despite a slightly higher wind generation forecast for Tuesday, Monday being a UK bank holiday.  Wind is forecast to contribute almost 5GW on Tuesday and solar generation is set to remain above normal for the remainder of the week.

Market anticipated supply disruption from storm Ida

Thursday’s slippage in oil prices was more than recovered on Friday as the market anticipated supply disruption from storm Ida which was due to hit the Gulf of Mexico and Louisiana over the weekend.  Producers had begun evacuating production platforms in the Gulf on Friday as the storm was forecast to reach hurricane force by Sunday.  West Texas Intermediate gained almost $2.00 while Brent crude was up by $1.63 a barrel to settle at $72.70, an increase of $7.52 week-on-week.  The market was also lifted by speculation that OPEC+ might reverse their decision to increase production this year as the Covid pandemic shows little signs of abating.  EU emissions prices jumped by 5% or €3.00 per tonne on Friday which pushed EU ETS unit prices to new record highs of over €60.00 per tonne.

UK Bank Holiday today, there is no trading on the gas market

Today being a UK Bank Holiday, there is no trading on the gas market.  The UK gas system is well-supplied and is forecast 10MCM long despite the ongoing restriction of Norwegian deliveries.  Crude oil prices have eased slightly as Hurricane Ida moved inland from the Gulf of Mexico without causing major damage to energy infrastructure.