Carbon prices are on the rise this morning

NBP markets pushed higher for a second consecutive session

NBP markets pushed higher for a second consecutive session yesterday with prices rising across the curve. A combination of temperatures and wind generation both significantly below seasonal averages have helped to drive prices higher, particularly with respect to the prompt and near-curve contracts. Adding further pressure, an unplanned outage at the Norwegian Oseberg facility reduced UK imports by some 20MCM on Wednesday with the site continuing to operate at a reduced capacity. The UK system remained marginally undersupplied throughout the session yesterday, as demand reached 362MCM, well above the seasonal average of 298MCM. Contracts for a January delivery rose 28.17p to finish the day at 374.49p a therm. A similar gain of 28.00p was added to the day ahead contract which settled at 373.05p a therm.

Wednesday saw gains made across the GB baseload power curve

Wednesday saw gains made across the GB baseload power curve with the prompt and near-curve contracts experiencing the greatest pressure. Wind generation and temperatures below seasonal average remain the driving factors for the price increases. The front month of January added £6.75/MWh to finish at £499.75/MWh while the summer 2023 contract posted a gain of £13.50/MWh to settle at £324.75/MWh. The day ahead contract recorded the largest gain of £47.45/MWh to settle at £364.50/MWh. Carbon prices slipped marginally with the December 2022 EUA contract down 42 cents at €88.19 a tonne.  

Brent crude prices extended their losses

Brent crude prices extended their losses for a fourth day in a row yesterday with the front month of February shedding $2.18 to end the session at $77.17 a barrel. Trading was volatile as the markets reacted to US Energy Information Administration data showing an unexpectedly large increase in fuel stocks leading to wider demand concerns, despite a decline in US crude reserves themselves. Recent announcements surrounding China’s changing pandemic responses have provided some support to prices and Chinese crude imports for November were 12% higher for this year compared to last. The recent weakening of the U.S. dollar has also helped buoy oil prices in the face of broader economic concerns which continue to limit demand forecasts.  

NBP futures market has opened with gains

The NBP futures market has opened with gains made in early trading today. Contracts for a January delivery most recently traded at 385.00p a therm, a rise of 10.51p with the summer 2023 contract up, but a more modest 2.95p at 365.00p a therm. Crude oil prices have so far halted their retreat with contracts for February most recently trading up $0.67 at $77.84 a barrel. Carbon prices have also risen with the December 2022 EUA up 67 cents at €88.79 a tonne. So far the UK system is over supplied by 5.5MCm today with a demand of 364.90MCM. On the prompt, the within day contract has added 24.95p with the latest trade at 400.00p a therm.