Carbon EUAs continued to break into fresh ground

UK gas futures recorded gains for a third day in a row

UK gas futures recorded gains for a third day in a row on Friday but over the week near futures were lower.  The front of the curve moved around 9.50p higher on Friday as a combination of lower Russian gas flows and tensions between Russia and the West provided support. Prompt prices were also buoyed on the day with the spot and day ahead products moving close to 10.00p higher over the day despite the GB gas system operated in equilibrium with demand at 296MCM.

 Baseload for the day ahead ticked up on Friday

Gains to NBP gas futures along with bullish carbon fueled the baseload power curve on Friday as the front month settled £7.50/MWh higher.  Gains of £5.50/MWh on average were recorded for contracts past the front month but over the week near curve contracts settled down by around £12.50/MWh. Baseload for the day ahead ticked up on Friday despite a forecast for strong wind generation for the start of the week.  Carbon EUAs continued to break into fresh ground with prices bearing in on the €100 per tonne mark.  Friday saw the spot close at €95.99 per tonne.

 The late run up in crude oil prices continued through Friday

The late run up in crude oil prices continued through Friday as both Brent and West Texas Intermediate surged on to set fresh seven-year highs.  The supply demand balance has tipped in favor of the demand side and supply worries increased going into the weekend with fears the wintry storm causing havoc in central and northeastern U.S. states could move south and disrupt oil production in Texas. Geopolitical tensions in the Middle East and at the Ukraine boarder have also boosted crude oil prices recently meanwhile OPEC+ still struggle to meet increases in monthly production targets. Brent closed at $93.27 a barrel on Friday up $2.16 a barrel on the day but was $5.10 a barrel higher over the week.

The crude oil markets have seen some swings in prices

Gas demand for GB is forecast at 297MCM which is 6% below the seasonal norm, however, supplies are lagging by 7MCM. Langeled flows are down 10MCM on Friday’s levels, while LNG send out is nominated at 87MCM, slightly higher for today.  There’s been no trades for the prompt yet, but the NBP futures market has opened softer.  The March contract is 12.99p down in early trades and the summer contract has moved a similar amount lower.  The crude oil markets have seen some swings in prices with Brent hitting $94.00 a barrel earlier and is currently just above the low of the morning at $92.27 a barrel.  

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