Carbon prices continued to recover

25 November 2022

 The day ahead index for the NBP settled at its highest level for the month

The day ahead index for the NBP settled at its highest level for the month yesterday as scheduled Norwegian maintenance works are expected to cut imports by 26MCM on Friday.  The spot closed 46.00p higher yesterday as the GB gas system struggled to balance having opened with a deficit.  Forecasts for wind generation have been revised lower from the weekend and cooler temperatures for the start of December provided support to the contracts for next week and balance of month.  December opened with losses of up to 18.00p but after a volatile session, the decline was pared back to 10.03p as the gains on the prompt fed into the near curve to leave December close at 291.69p.  The summer contract settled at 310.03p, down 9.09p.

 Baseload futures settled mixed yesterday

Baseload futures settled mixed yesterday but a lack of liquidity distorted gains for some contracts.  The front month declined by £8.75/MWh to £295.25/MWh yesterday while the February contract was marked £43.50/MWh higher based on the bid/ offer quotes. Further along the curve, the summer eased by £7.75/MWh and the winter-23 contract lost £5.25/MWh on the day. Baseload for the day ahead recorded its third gain in a row on Thursday as the NBP prompt posted strong gains.  The contract gained £12.15/MWh to settle at £140.05/MWh.  Carbon prices continued to recover with EUAs gaining an average of €2.54 per tonne.

Crude oil markets were muted yesterday with the Thanksgiving holiday

The crude oil markets were muted yesterday with the Thanksgiving holiday leaving the U.S. market closed apart from on-line exchanges. Brent settled 7 cents lower at $85.34 a barrel leaving the contract near a two-month low. Discussions on the price cap for Russian oil continue but EU nations seem to be unable to agree a level that suits all members while preventing Russia profiting from exports of oil.  A higher cap could allow Russia to sell at a profit while boosting available supplies, however, the Kremlin have stated they would not sell to any nations applying a price cap. In China, the government are imposing restrictions to stem the spread of Covid-19 which adds to demand concerns.

 Crude oil markets are bullish this morning

The GB gas system is forecast to run 7MCM short against today’s demand of 270MCM.  While demand has increased, Norwegian imports are also nominated higher at 87MCM this morning while LNG send out is 69MCM.  Prompt markets have opened softer with the spot last trading at 150.00p, down 15.05p.  In the futures market, the front month, December opened firmer but latest trades have seen the contract exchange 9.00p below the morning high or 5.65p down on last night’s close. After a slow day yesterday the crude oil markets are bullish this morning with Brent $1.37 a barrel up at $86.71 a barrel.  
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