Rising concerns for Deutsche Bank sparked Carbon sell off

27 March 2023

Gas Market

NBP futures continue to trade rangebound after Friday’s declines reversed most of the gains from the previous session.  The April contract ended the week at 100.71p, declining 5.83p on Friday while the summer contract which also expires on ICE this week settled at 104.83p, down 5.16p on the day or 3.69p over the week.  With April reaching the recent low of 94.28p and the summer contract settling below the 100.00p mark just the once in the last ten days the market appears to have found resistance at the current price range.  On the prompt, there were minor gains posted on day despite the GB gas system operating in equilibrium throughout the session.

Power Market

A significant drop in carbon and a decline in NBP futures weighed on the GB power curve on Friday.  Baseload futures at the front of the curve fell by an average of £5.50/MWh on Friday, with April closing at £106.75/MWh.  Carbon EUAs shed around 5.5% while UKAs closed around 3.3% lower after rising concerns for Deutsche Bank sparked a sell off. Baseload for the day ahead settled higher boosted by cooler temperatures for the start of the week and gains on the NBP prompt. At the close, the day ahead product settled at £119.00/MWh.

 Oil Market

Crude oil prices started last week rebounding with Brent posting gains on the first three days of the week but ended the five-day period with two sessions of declines.  The markets haven’t shaken off the jitters caused by the recent banking crisis and with the equities markets falling again on Friday with fresh concerns for Deutsche Bank, crude oil prices followed.  There was some support on the day from expectations for increased demand in China, and this limited the loss on Friday. Demand in the second largest consumer of crude oil is expected to top 16m barrels per day.  At the close of play Brent for May delivery was just shy of a dollar down at $74.99 a barrel, while the U.S. benchmark, West Texas Intermediate settled at $69.26, down 70 cents a barrel.

Markets this morning

The markets have opened firmer this morning with the front month of the NBP curve, April 5.29p higher at 106.00p.  The summer contract has edged up 3.17p in early exchanges with no activity on longer contracts.  Prompt prices have opened higher too with the last trade for the day ahead product going through at 105.35p.  The cooler temperatures have pushed GB gas demand above 300MCM for the day and supplies are lagging demand by 8MCM.  Crude oil prices have increased with Brent for May delivery 33 cents up at $75.32 a barrel.  
Find out more about our Commercial Energy Services