GB power futures continued to balloon

Prices fell back in late trading to close fractionally lower

The 15% rise in winter gas prices on Tuesday, following the German decision to delay certification of the Nord Stream 2 pipeline, was added to in early trading on Wednesday.  The December contract hit an intra-day high of 255.00p but prices fell back in late trading to close fractionally lower day-on-day.  The markets weighed some more positive supply news in the form of increased LNG deliveries to the UK and Western European ports to offset the lack of increased Russian supply.  The UK system was well-supplied throughout the day as demand fell below the seasonal norm with higher wind generation than previously forecast.  Prompt gas contracts retained early gains however with the spot price closing 10.00p higher and day ahead gaining 5.20p.

Day ahead baseload power gained

GB power futures continued to balloon on Wednesday as the gas price rises of recent days were compounded by near record carbon prices.  The remaining winter months gained an average of £10.00/MWh while January settled above £250.00/MWh for the first.  EU ETS prices fell off their record highs of Tuesday but UKA’s gained £1.45 to trade above £60.00 per tonne. Day ahead baseload power gained £16.00 while the week ahead contract was up by £12.00/MWh on forecast lower wind availability next week.  Temperatures are also forecast lower for next week but only in line with seasonal norms for this time of year.

Bullish inventory data from the U.S.

Bullish inventory data from the U.S., which showed a decline in crude oil stocks last week, was overshadowed by warnings of possible over-supply from OPEC+ and the International Energy Agency yesterday.  Oil prices were supported initially on the bullish inventory data from the U.S. but fell off in later trading with Brent dipping below $80.00 on warnings of over-supply from OPEC and the IEA, before rallying slightly towards close of business to settle at $80.28, or $2.15 a barrel lower day-on-day.  WTI settled below $80.00 for the first time in over 2 weeks, shedding $2.40 to settle at $78.36.  Carbon prices moved off the record highs seen on Tuesday as EU ETS unit prices settled in a range between €67.15 and €68.19 per tonne

Demand on the UK gas system is running below the seasonal norm

Temperatures holding above normal and wind generation remains at around 10GW this morning.  Demand on the UK gas system is running 60MCM below the seasonal norm and the system is forecast 25MCM long for today.  The fractional recovery of Tuesday’s price surge seen yesterday is continuing in early trading today, albeit with very minor movement lower.  Crude oil prices have eased overnight with Brent trading below $80.00 a barrel and West Texas at $78.00.  Carbon emissions cost have slipped back also with EU ETS unit prices down 66 cents from yesterday’s closing levels.