Prices moved in both directions
The gas market was quite unsure of what direction to take over the course of the session on Monday as prices moved in both directions. Early movement was lower as contracts followed on from the sell off from last Friday. Contracts firmed in the middle part of the session be in truth the movement was relatively minor in the context of recent volatility. Prices turned weaker towards the close and at market settlement the gas curve was happy to give up some more premium. The gas system was well balanced on the day with little need for storage withdrawals as LNG output remained strong.
The GB baseload power day ahead contract continued to firm
The GB baseload power day ahead contract continued to firm pressured by low renewable generation availability. Wind generation was expected to drop further to 6.7GW as conditions turned less favourable. The minimum supply margin tightened as a result and put pressure on prompt prices with day ahead power settling up by £6.00 at £223/MWh. On the baseload power curve prices eased taking the cue from the wider energy complex. Gas led losses pressured the curve with losses in the EUA and UKA markets also adding to the pressure. On the day carbon EUA contracts shed just under €4.00 per tonne.
EUA carbon contracts fall by just under €4.00 per tonne
Crude oil prices went lower for the second session is a row as some of the factors which provided recent support began to change. While tensions remain high in Kazakhstan remain high but some of the lost production seems to be close to coming back online. The resumption of production could bring 700,000 barrels a day back to the market. The standoff between the United States and Russia over Ukraine remains and risk premium associated with this issue remains but at least talks have started. Yesterday also marked the latest auction for EUAs and initial transactions saw EUA carbon contracts fall by just under €4.00 per tonne.
UK NBP gas prices have opened weaker this morning
UK NBP gas prices have opened weaker this morning and in the first two hours of trading the market is managing to hold onto these losses. The front month February contract is priced at 202.26p per therm, 3.62p lower than last night’s close. Summer delivering contracts are also lower by between 4.50p and 5.50p. The gas system is displaying a significant surplus of 24MCM at the moment with another 13 LNG tankers due to deliver gas to the UK by 21st January. In early trading EUA carbon contract are seeking to recover some of the ground lost yesterday with all contracts up by just over €2.00 per tonne. Crude oil markets are also trading higher with Brent priced at $82.08 a barrel.