An unplanned outage on the giant Norwegian Troll field
Falling temperatures and high wind-chill factors saw demand running ahead of supply for much of the day yesterday, despite robust wind generation levels. Prompt gas prices jumped by an average of almost 20.00p with the day ahead up by 21.95p. Near futures contracts for the remainder of this winter gained an average of 15.56p but Summer 22 and Winter 22 were up by 21.50p. The immediate cause of gains on the prompt and near futures markets was an unplanned outage on the giant Norwegian Troll field. While the duration of the outage is unknown, it would not account for the bigger gains on Summer and Winter 22 contracts which have pushed the Calendar Year 2022 contract up by over 25% so far this week.
The day ahead contract jumped
A further surge in carbon prices, and strong gains in gas futures, pushed the GB baseload power front month contract to a new high of £333.50 on Wednesday. Carbon EUAs rose by around €3.60/tonne for a second consecutive day yesterday. Contracts hit new record highs yet again, pushing €90.00 per tonne. The day ahead contract also jumped despite a forecast for reasonable wind generation levels again tomorrow. Wind generation averaged 10GW on Wednesday and is forecast to average 8GW today but to begin to fall off over the weekend and remain low next week.
Another surge in carbon prices saw EUA’s pushing €90 per tonne
Another surge in carbon prices saw EUA’s pushing €90 per tonne yesterday but crude oil price were largely rangebound on the day. The weekly U.S. inventory data showed little change in crude stocks while distillate stocks were up slightly week-on-week. Any downside this might have had for oil prices was offset by a weakening of the dollar exchange rate against other major currencies on Wednesday. Brent crude edged marginally higher to settle at $75.82 a barrel while the U.S. benchmark, West Texas Intermediate recorded a similar marginal gain to settle at $72.36 a barrel.
Near futures gas prices have relinquished most of yesterday’s gains
The UK gas system is better supplied today despite lower wind generation leading to increased gas-fired power demand. It would appear that deliveries from the Troll field have been restored with Langeled flowing at maximum rates this morning. The system is forecast 20MCM long against forecast demand of 320MCM for today. Near futures gas prices have relinquished most of yesterday’s gains but seasonal contracts for Summer 22 and beyond have yet to trade. On the oil market, Brent crude has surrendered all of yesterday’s gain as carbon prices retreat with losses of over €2.50 per tonne on EUA’s in early trading this morning.