Carbon EUAS picked up over the session yesterday

18 July 2023

Gas Market

With the return of Norwegian gas imports after an extended maintenance run the market eased on opening yesterday but prices flipped between gains and losses for much of the session.  Nominations through the Langeled feeder were just shy of 60mcm yesterday, the highest since early summer. This left the GB gas system oversupplied for the day which enabled storage supplies to be topped up. Planned maintenance works at the Dragon LNG facility will cut capacity by 50% from Thursday, but there have been very little LNG flows lately. However, there was good news with a confirmation that a shipment is expected later in the week at South Hook. Near futures settled with modest losses at the end of the session with August declining by 1.80p while the Winter contract closed 1.32p down.  Prompt prices were mixed with lower wind generation expected to add to gas demand.

Power Market

Modest declines in gas futures on the NBP fed into the GB baseload curve on Monday but losses were curbed by gains in carbon.  The front month August shed £3.75/MWh to close at £71.75/MWh while the Winter-23 contract settled at £112.75/MWh, down £2.13/MWh. Carbon EUAS picked up over the session with the spot added 59 cent per tonne to close at €85.11 per tonne. Baseload for the Day ahead took support from forecasts for lower wind generation and settled £10.26/MWh up at £88.05/MWh. Wind generation was above the seasonal norm on Monday but is expected to drop to below 1.0GW on Tuesday.

Oil Market

More disappointing economic data from China weighed on crude oil prices on Monday while two Libyan oil fields resumed production after disruptions late last week.  China’s gross domestic product (GDP) increased 6.3% year on year but was down on the forecasts of 7.3%.  This has cast a shadow of doubt on the world’s second largest consumer of oil and the forecast growth in oil demand for 2023. In June the International Energy Agency, based in Paris, forecast that global oil demand will grow by 2.4 million barrels per day for 2023, putting much of this increase down to growth in China in the second half of the year. The resumption of production in two of the three oil fields in Libya shut down last week due to protests also pressured prices yesterday.  Brent settled $1.37 a barrel down at $78.50 a barrel.

Markets this morning

GB gas demand has picked up this morning with a requirement for gas fired generators to compensate for the low wind generation today.  The markets have responded and prompt and near curve contract have opened a touch firmer.  The Spot price is 2.25p higher at 62.00p while the Day ahead product has added 1.60p in early exchanges.   On the curve, the August contract is trading below the morning high of 64.64p but is 1.57p up on yesterday’s close at 63.16p, Winter-23 is at 117.56p, showing a gain of 2.05p.  Brent is trading in a tight range this morning and last traded at $78.55 a barrel.  
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