NBP near futures made wide swings in reaction to a surge in carbon EUAs on the day
The volatility in the energy markets was evident once again on Wednesday as the NBP near futures made wide swings in reaction to a surge in carbon EUAs on the day. An element of last-minute compliance buying for 2021 was attributed to a surge in carbon prices yesterday. The May contract was trading around 4.00p higher through the morning but then rose sharply just after midday with the contract peaking shy of 200.00p. Late in the session May traded in negative territory briefly before settling with a 4.55p gain day on day. The spot and day ahead products reversed earlier gains and settled with losses of over 23.00p. The GB gas system remained comfortable as LNG send out remains robust while planned maintenance at the Troll Field was delayed a day.
Carbon EUAs surged higher on Wednesday
Baseload for the day ahead settled at its lowest point since before the Russian invasion of Ukraine yesterday. The product settled at £153.00/MWh, declining by almost 5.0% from the previous settlement. Wind generation is now expected to pick up on Thursday and Friday before falling over the weekend. Carbon EUAs surged higher on Wednesday with contracts out to 2024 gaining 8.3%. An element of last-minute compliance buying for 2021 was attributed to the surge in carbon prices yesterday. The gains in carbon fed into the baseload power curve as contracts out to the winter settled an average of £4.10/MWh higher.
The crude oil markets settled mixed on Wednesday
The crude oil markets settled mixed on Wednesday as Brent for June delivery settled 45 cents a barrel lower while the May contract for West Texas Intermediate added 19 cents a barrel. Crude oil prices had traded in negative territory for much of the session following the release of the latest inventory report from the Energy Information Administration. Although U.S. reserves of crude oil were depleted by 8 million barrels last week, figures for gasoline and distilled products pointed to a slowdown in demand. Meanwhile the supply side has concerns too, with blockades on major oilfields in Libya shutting in 550,000 barrels per day while OPEC+ fell 1.45 million barrels per day short of its March production target.
The gas markets have opened higher this morning
Following yesterday’s volatile session, the gas markets have opened higher this morning. On the curve, the front month has added 9.11p to last trade at 186.99p while the winter contract is at 241.00p, up 6.81p. Prompt prices are also rising in early exchanges with the spot and day ahead at 142.00p and 145.00p respectively. The GB gas system is running 21MCM long against today’s forecast demand of 251MCM and flows through the Langeled feed down below 60MCM. The June contract for Brent last traded at $108.17 a barrel, up $1.37 a barrel.