Early gains in carbon EUAs were pared back late in the session

Prices moved lower later in the session

After a slow start near futures struggled to find direction through the morning but prices moved lower later in the session with hints of higher Russian gas bookings for Europe.  The remaining months out to the summer fell by almost 8.00p on average through the afternoon with the March contract settling at 179.54p, down 6.45p.  Forecasts for cooler temperatures before the weekend coupled with a short gas system yesterday morning supported the prompt with the day ahead settling 3.00p higher. Demand on the GB gas system was 276MCM and supplies recovered from an early deficit with LNG ramping up to 91MCM while gas flow through the Langeled feeder from Norway were down on last week’s levels at 60MCM.

Early gains in carbon EUAs were pared back late in the session

Baseload power futures eased again on Wednesday as the market responded to the decline on the NBP curve.  A late reversal in carbon prices also added some downside in the afternoon.  At the close the front month, March, was down £4.00/MWh while the summer shed £7.85/MWh.  Early gains in carbon EUAs were pared back late in the session and contracts settled with minor losses.  Wind generation was below 10.0GW on Wednesday but is forecast to rise going into the weekend which weighed on prompt prices yesterday.  Baseload for the day ahead fell by £8.05/MWh to £164.20/MWh.

U.S. crude oil stocks fell by 4.8 million barrels last week

A bullish report from the Energy Information Administration, which showed U.S. crude oil stocks fell by 4.8 million barrels last week put a halt to the decline in crude oil prices yesterday.  The latest inventory report from the U.S. government body has U.S. reserves at the lowest level since October 2018.  It also confirms that supplies are becoming tighter and at the current rate would offset any extra oil that could come from Iran.  Earlier in the week, prices eased on reports that Washington resumed contact with Iran, which gave the market hope that if sanctions were lifted, Iran could increase output. At the close Brent settled at $91.55 a barrel up 77 cents a barrel.

Prompt prices have opened lower this morning

Prompt prices have opened lower this morning although trading has been thin.  The spot last traded at 178.50p per therm which is 1.55p down on yesterday’s close.  The futures market opened firmed with the front month retracing all of yesterday’s losses but early gains along the curve have been reversed and the front month is now at 179.00p which is a half a penny down on last night’s settlement.  The GB gas system is forecast 8MCM long against today’s demand of 286MCM.  Crude oil prices are trading rangebound this morning and latest trade for the global benchmark was at $91.42 a barrel which is 13 cents a barrel down.

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