Gains in carbon prices

Decline in gas futures continued on Monday

The decline in gas futures continued on Monday with near futures on the NBP shedding around 36.00p per therm on average in response to pressure ahead of possible market intervention by the EU commission.  The October contract settled at 347.56p, the lowest point since mid-July.  The front two season contracts also closed around 36.00p down with the winter settling at 481.88p and summer at 415.00p.  Prompt prices eased a touch yesterday but could come under further pressure over the coming days with maintenance works on the BBL line to the Netherlands preventing exports and possibly leaving gas stranded in the UK.

Carbon EUAs rebounded after over a week of losses

Gains in carbon prices tempered losses on the GB baseload power curve on Monday.  The October contract closed £12.85/MWh down at £322.40/MWh while the winter contract settled at £475.50/MWh, down £29.75/MWh.   Carbon EUAs rebounded after over a week of losses and the spot gained 8.7% or €5.72 per tonne yesterday. Baseload for the day ahead settled slightly higher on Monday with wind generation forecast to be less than half the levels seen yesterday.  Generation from wind in the UK is expected to drop to around 4.0GW on Tuesday and remain below recent averages for the remainder of the week.

Crude oil prices rose for a third day on Monday

Crude oil prices rose for a third day on Monday with a slump in the dollar adding to supply concerns for the winter.  Global oil supply is expected to tighten when the EU embargo on Russian oil takes effect in early December.  The introduction of a price cap by the G7 to limit the revenue Russia can receive from exports may not have the desired effect as Russia has increased crude oil sales to India and China, while the cap level is unclear.  The U.S. dollar slipped against a basket of currencies yesterday adding to the upward support in crude oil prices.  At the end of trading, Brent for November delivery gained $1.16 a barrel to close at $94.00 a barrel.

 Early exchanges on the NBP have seen near curve contracts ease

Early exchanges on the NBP have seen near curve contracts ease this morning.  The front months are down by around 9.00p with October last trading at 338.51p. Further along the curve very little has traded but the bid/ offer spreads are pointing to a softer opening for the seasonal contracts.  Prompt prices are fairly flat or slightly lower even though the National Grid is showing GB gas supplies are lagging by 13MCM against today’s demand of 211MCM.  Crude oil prices are trading around a dollar a barrel higher this morning.  

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