EUA Dec-23 contract hit its lowest intraday price of the year

24 November 2023

Gas Market

UK gas prices opened in positive territory on Thursday and maintained the upward push throughout the session. Risk premium was particularly evident at the front end of the curve, with the front month contract December 23 opened at 116.84p and eventually closed at 119.87p, up 6.82p on the day while Summer 24 gained 4.28p to settle at 117.69p. Yesterday’s gains in the gas market were once again influenced by weather fundamentals, a common driver during the winter season. Despite the weather driven volatility, it should be noted that Europe is currently in a favourable position, with robust gas supplies including ample gas in storage. Price volatility was strong in the prompt market also, with day ahead gas closing 11.25p higher at 120.05 pence per therm.

Power Market

GB baseload power contracts extended their recent gains on Thursday. Aligned with the gas market, gains were most evident on the front of the curve as the December 23 contract moved £4.75/MWh higher to close at £103.50/MWh. Further along the curve price movement was limited with the 2025 seasonal contracts moving £0.23/MWh higher on average. EUA Dec-23 carbon contract had its largest daily increase in two weeks, despite reaching €74.65 its lowest intraday trading price of the year. The Dec-23 contract eventually closed €1.59 higher on the day at €76.69 a tonne.

Oil Market

Global oil markets experienced a downturn on Thursday for the second consecutive session, triggered by an unexpected four-day delay in OPEC’s planned meeting. The delay sparked speculation regarding potential adjustments to output cuts, as some African nations have expressed a desire to increase their quotas. This pause in OPEC’s decision-making process raises concerns about the organisation’s response to balancing supply and demand fundamentals. Given that OPEC holds major influence over oil prices, being responsible for 40% of global oil production. The front month contract dipped to a low of $80.19 before eventually settling at $81.42 per barrel, down $0.54 on the day.

Markets this morning

This morning’s UK gas market is relatively flat with limited trading activity. The front month has opened 0.87p lower, last trading at 119.00 pence per therm while Q1-24 is down 1.02 at 122.93p. The UK gas system has opened undersupplied, which is supporting gains in the prompt market, as the Within day contract last traded at 121.00p. Weather fundamentals are expected to continue to influence the market, as temperatures drop below seasonal norm this weekend. In the wider energy mix, carbon prices have failed to sustain the uptick recorded yesterday, with the Dec-23 contract last trading at €76.50 a tonne. Find out more about our Commercial Energy Services.