Prompt gas prices surged
Increased wind generation saw gas-fired power demand fall on Monday, but overall demand increased to 180MCM as exports via the Belgian and Dutch interconnectors totalled 75MCM on the day. The high export rate was made possible by increased Norwegian deliveries which topped 110MCM yesterday. The UK gas system ran in surplus throughout the day but prompt gas prices surged with the spot and day ahead contracts gaining over 20.00p. Near futures contracts began another week with big gains, October hitting a new front month record high of 190p and the December and January contracts breaching the 200p mark.
GB power futures surge to new record highs
A combination of strong gains on both the gas and carbon markets caused GB power futures to surge to new record highs of over £200/MWh on Monday. The front month contract settled at £208.00/MWh while the Winter 21 contract gained £21.25 to settle at £207.50. EU ETS unit prices gained a euro per tonne to settle in a range between €64.75 and €65.77 per tonne. The day ahead contract rose with similar support and despite strong renewable generation providing a comfortable supply margin on Monday. The GB grid was long by an average of 300MW on the day with wind generation averaging over 10GW.
Crude oil prices gained for a fifth straight session
Crude oil prices gained for a fifth straight session with Brent up by $1.44 a barrel on Monday. The global benchmark came within 10 cents of $80.00 before easing back a little to close at $79.53. A stronger dollar, shrinking reserves and forecast increased demand in Q4, all played on the upside to maintain the recent rally in crude oil prices. OPEC will meet next Monday to discuss production levels with a market expectation of some further increases in production before year end. Elsewhere, the markets are concerned for Chinese economic stability as the Evergrande property giant still teeters on the brink of collapse.
Carbon prices continue to gain
As demand on the UK gas system picks up with lower temperatures, LDZ demand is running at 79MCM this morning. Exports to Belgium and the Netherlands are running a close second at 72MCM while gas-fired power demand is at 56MCM as wind generation remains robust. Norwegian deliveries have ramped up further and are within 5MCM of maximum flows to the UK but much of this supply is being re-exported via Bacton-Zeebrugge and the Balgzand-Bacton interconnectors. Prompt and near futures gas prices are spiralling higher again this morning with Winter 21 up by almost 16.00p. Brent crude has broken above $80.00 a barrel and carbon prices continue to gain.