Carbon EUAs hit a fresh 13-month low yesterday

30 November 2023

Gas Market

After a muted opening, NBP futures displayed more weakness on Wednesday and continued to add to the losses of the previous three sessions. The front month, December, on its last day trading on the ICE platform settled over 6.00p down at 102.34p, the lowest settlement for the contract since 21st of January-2022, a month before Russia invaded Ukraine.  The Summer-24 contract declined by 5.55p yesterday bringing the loss for the last four days to 15.24p.  The prompt was helped by a revision to the daily demand which was lowered to 337mcm and left the GB gas system long for much of the session.

Power Market

There was significant losses to NBP futures and carbon prices on Wednesday which in turn weighed on the GB baseload curve.  The front month, December, settled £4.50/MWh lower yesterday while the Summer-24 contract lost £4.85/MWh to close at £90.90/MWh.  Carbon prices continued to show weakness with EUAs for contracts out to 2025 falling by an average of 2.6% or €1.98 per tonne. With wind generation falling below recent averages the Day ahead product for baseload settled £17.18/MWh higher yesterday.  Supply margins are expected to tighten as demand increases 41.5GW for Thursday.

Oil Market

Crude oil prices oscillated between gains and losses on Wednesday as the market which had expected an indication that an agreement to extend or deepen production cuts by OPEC+ failed to come.  During the first half of the session Brent traded between $80.96 and $83.06 a barrel and then displayed weakness in the afternoon in the absence of a confirmation ahead of tomorrows rescheduled OPEC meeting. Prices rallied before the close again with hopes an agreement had been reached and Brent settled $1.42 higher at $83.10 a barrel.  Earlier in the session prices were also buoyed by reports of a disruption to crude oil exports from Kazakhstan where a storm has prevented loadings from the Caspian Pipeline Consortium where up to 2m barrels per day have been impacted since Monday.

Markets this morning

After the declines of the last four sessions, NBP futures have opened a touch higher this morning.  January has assumed front month status on the ICE platform and early activity has seen the contract move 1.95p higher to 107.61p. The Summer-24 contract is just 0.80p up with the latest trade going through at 103.25p.  Prompt prices have yet to get going but a short gas system may cause concern to the market.  The crude oil markets are focused on the OPEC+ meeting today and prices have continued to rise this morning with Brent almost a dollar higher at $84.08 a barrel. Find out more about our Commercial Energy Services.