The EUA spot carbon contract increased

Wide bid/offer spreads were a feature on most contracts

Forecast gas demand in the UK increased to 356MCM on Thursday as cooler weather and strong CCGT generation demand impacted.  The system was struggling to cope early on a deficit of 8MCM was present for much of the day.  LNG send out was initially 108MCM but this grew to 115MCM over the course of the day.  The continued level of LNG send out is not surprising given that there a further 12 tankers expected to berth in Britain by the end of this month.  On the market gas prices initially opened lower but failed to hang on though these losses for long.  Wide bid/offer spreads were a feature on most contracts and upward pressure on Summer 2022 was most evident. at market closed the front two months finished a penny lower but Summer 2022 gained 5.78p/ therm.

GB baseload prompt prices moved lower

Save for the front month February contract which shed £6.25 the remainder of the baseload power curve pushed higher.  This additional premium was driven by gas and carbon prices which firmed on the day.  The EUA spot carbon contract increased by €4.10 to close at €85.36 per tonne.  EUA contract for 2022 to 2024 closed in a range of €85.71 and €87.86 per tonne. GB baseload prompt prices moved lower with a widening minimum supply margin weighing on contracts.  Ample wind generation on the day was the main driver and the day ahead baseload power contract fell by £9.00 to £182.90/MWh.

Crude oil markets continued on their steady march

Crude oil markets continued on their steady march upwards for most of Thursday as for the fifth session in a row price firmed.  The market has been displaying bullish tendencies as of late and once the key resistance point of $80 dollars of barrel was breached on the 1st of January 2022 the Brent crude contract has never traded below that level so far this year.  It is now clear that the next resistance level of $90 a barrel is coming into play next.  Crude shied away from the next resistance level as operations on the Kirkuk-Ceyhan pipeline resumed and some of the heat was taken out of the market.  Brent crude remains at a seven-year high as it closed flat at $88.38 a barrel.

 Russia/Ukraine tensions once again a key factor

Forecast UK gas demand for today is 352MCM and the system is long by 7MCM as increasing wind generation negates some demand from CCGT gas generation.  The comfortable supply situation is keeping the gas prompt in check and prices are staying just below last night’s close.  It is a different story on the forward curve where contracts have opened firmer, and gains are the order of the day.  The front month contract has given up yesterday’s loss already and is priced at 185.50p per therm, 6.37p higher than last night’s close.  Contracts out to Winter 2022 are up by similar amounts with Russia/Ukraine tensions once again a key factor.

Read more carbon market news in our Insights section