The global benchmark reaches a 7-year high

Spot and day ahead prices gained marginally

An early supply shortfall on the UK gas system saw prompt and near futures prices gain strongly in early trading on Monday.  LNG send-out increased to 45MCM through the day as demand remained stagnant, helping turn the system into surplus by midday.  Prices fell back in the afternoon on the improved supply position and contracts for the current winter months recorded gains averaging 3.00p.  Spot and day ahead prices gained marginally as temperatures are forecast to remain above average for the rest of this week.  The week ahead contract gained 3.00p however on forecasts cooler weather.

Carbon prices continued to recover some of the losses of early last week

GB baseload power contracts tracked gains on the broader energy complex on Monday supported by higher carbon prices on the day.  Gains stretched to £9.00/MWh for January 22 but seasonal contracts recorded maximum gains of £2.00/MWh.  Carbon prices continued to recover some of the losses of early last week with EU ETS prices gaining 35 cent to finish close on €60.00 per tonne. The day ahead price was little changed but week ahead gained £13.00/MWh as wind generation was forecast lower next week.  Wind availability was averaging around 8GW on Monday however and is expected to remain reasonably robust this week.

Crude oil picked up on Friday’s bull run to hit an intra-day high

Crude oil picked up on Friday’s bull run to hit an intra-day high of $86.70, on Monday morning before falling back to settle at $85.99 a barrel.  The recent rally has taken the global benchmark to a 7-year high as energy prices generally have soared in recent months.  The U.S. benchmark, West Texas Intermediate, hovered close to $85.00 in early trading but profit-taking pulled both benchmark crudes lower in later trading.  A modest strengthening of the dollar also helped reverse some of the bullish sentiment on the oil market yesterday.  Carbon prices continued to recover some of the losses of early last week with EU ETS prices gaining 35 cent to finish close on €60.00 per tonne again.

Near futures gas prices have edged higher again

Demand on the UK gas system has fallen overnight with higher temperatures prevailing today.  Wind generation has held up leaving gas-fired power demand unchanged from yesterday.  Exports to mainland Europe have increased while LNG send-out has decreased but the system is still forecast 10MCM long for today.  Near futures gas prices have edged higher again in early trading this morning with the front month up by 4.29p and Summer 22 up by 1.75p.  On the oil market, yesterday’s late sell-off continued on Asian markets overnight and Brent crude is down 24 cents to currently trade at $85.75 a barrel.