Both the EUA and UKA carbon markets continued their recent downward trends

Gas Market

After opening in positive territory, NBP futures reversed direction and continued the recent downward trend, recording the fourth day of losses out of five due to healthy near-term fundamentals. Three LNG cargoes are due in the UK in the next week while wind generation is forecasted to exceed average levels for the next week, reducing gas for power demand. The new front month September-23 contract briefly traded as high as 76.88 p/therm but eventually settled down 2.85 p/therm at 67.90 pence per therm. When we look at the five-day average, its’s the front of the curve which has lost the most premium, September-23 contract down 17.26 p/therm while the calendar year 2024 is down 12.08 p/therm. On the prompt, Within day contract was flat on the day while the Day ahead contract was down 2.55 pence per therm on the session.

Power Market

GB baseload power tracked the gas and carbon markets and shed value across the curve on Tuesday. Just as we saw in the UK NBP market, the Summer-24 contract took the brunt of the downward pressure, settling down £4.75/MWh at £107.00/MWh. Over a five-day movement, the new front month September-23 contract has declined by £13.50/MWh. Both the EUA and UKA carbon markets continued their recent downward trends on Tuesday. EUA Dec-23 settled down €2.03 at €84.73 a tonne while UKA DEC-23 settled at £42.75, down £2.83 on the session.

Oil Market

Brent crude oil prices were marginally lower on Tuesday due a stronger dollar and possible profit-taking, after the market rallied in July, factoring in tightening global supplies and demand growth in the second half of the year. A stronger dollar makes crude oil more expensive for investors holding other currencies. The decline in prices came despite a pledge by Chinese ministries, regulators and the central bank to provide more financing support to small businesses to boost economic recovery. Economic growth in China, one of the worlds largest energy users, would increase demand for oil and drive oil prices higher.  The new Brent crude oil front month October-23 contract closed down $0.52 a barrel at $84.91.  

Markets this morning

NBP futures continued the recent downward trend opening lower this morning. All contracts are currently trading in negative territory except for the front month September 23 contract which has traded as high as 70.89 p/therm, and is currently trading at 69.25 p/therm, up 1.35p on the day. Winter-23 is currently trading at 115.2 p/therm, down 2.39 on the session. On the prompt, the Within day product has yet to trade and the day ahead contract is trading down 1.00p as the UK gas system has opened slightly under supplied. Brent crude oil is currently trading up $0.65 a barrel at $85.65 as U.S. oil stocks declined by more than forecasted.  

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