EUA carbon contracts have moved off their record highs

Premium added during the previous session was retraced

UK gas prices at the front of the curve opened weaker on Thursday morning and the premium added during the previous session was retraced as the market seemed to change its mind regarding recent capacity booking activity by Gazprom.  Reports of Gazprom capacity bookings or lack of them should be treated with caution given the small scale of the volumes involved and the impact on the broader European gas market.  At one point the front month January contract was down by 16.53p as it traded at a low of 228.00p.  The market was quite dynamic on the day with pricing changing direct on multiple occasions.  At market settlement some modest losses at the front of the curve were offset by gains further out.

Losses were stronger in the early part of the session

GB power futures at the front of the curve shed some modest premium in line with similar losses on the NBP gas market.  Losses were stronger in the early part of the session but narrowed considerably as gas contracts firmed and strong gains emerged in the carbon market.  EU ETS unit prices hit new record highs of over €79.00 per tonne as over $3.00 per tonne was added.  While day ahead baseload power firmed to £245.50/MWh the rest of the power prompt eased as the outlook for increased wind and nuclear improved.

 Increase in crude oil prices was modest

Crude oil markets staged a mini rally on Thursday as prices for the front month February contract firmed over the course of the day.  The increase in crude oil prices was modest enough given the losses that the product has experienced in recent sessions.  Crude oil hit a low point of $65.72 at one stage with losses at that point being in excess of $3.00.  The market rallied in the afternoon session with Brent crude establishing a foothold above $70 a barrel before falling back to $69.67 at the close, up by 80 cents from the previous settlement.  Crude oil markets are still down by $12.55 in the last five days and remain under pressure as more covid 19 related restrictions impact on future demand prospects.

 Crude oil prices have posted further gains

Following the conclusion of the OPEC meeting crude oil prices have posted further gains as the Cartel agreed to maintain the steady increase in production.  The decision to increase production by just 400,000 barrels a day was less that what was been required by oil consuming nations.  Brent crude is trading at $71.36 a barrel, up by $1.67 from last night’s close. Gas contracts at the front of the curve have opened weaker this morning with January & February down by 8.00p and March down by 9.00p.  Further out Summer 2022 is trading at 115.20p/therm, down by 1.44p.  EUA carbon contracts have moved off their record highs and are 85 cents lower than last night’s close.