Carbon EUA Spot price settled at €59.99 per tonne, its lowest level for 22-months

23 January 2024

Gas Market

After last week’s cold snap, the arrival of milder temperatures and robust wind generation drove NBP futures and prompt prices lower early on Monday. The market responded to the comfortable gas system and ample gas still available with just over two months of the current winter to see out.  Near futures set fresh two-year lows yesterday as the front month traded down to a low of 65.19p per therm but gradually ticked up through in the afternoon session to settle at 66.91p, posting a loss of 2.95p on the day.  The Summer-2024 contract declined by 2.43p to close at 68.04p.  Prompt prices also began the week lower, and losses were extended with the Spot and Day ahead closing at 67.05p & 65.75p respectively.  

Power Market

Following the slight uptick at the end of last week the power markets were bearish on Monday as lower gas prices combined with falling carbon to weigh on the power curve.  The February contract settled £4.20/MWh down at £65.25/MWh.  It was the largest decline of the day as losses were diminished as the curve moved out. Wind generation is forecast a touch down on Monday’s levels for Tuesday and baseload for the day ahead settled higher at £55.98/MWh. Weaker demand across Europe has pressured carbon prices recently and after a hiccup on Friday, EUAs trended lower again on Monday.  The Spot price settled at €59.99 per tonne, the lowest price for 22-months.   

Oil Market

Brent settled above the $80 a barrel mark on Monday for the first time in almost two months after Ukraine launched drone attacks on Russia’s Novatek oil terminal at the weekend. The plant in St Petersburg mainly produces naphtha which is shipped to Asian markets and jet fuel for Turkey. The attacks added to supply concerns as tensions in the Middle East remain high while production in North Dakota continues to be hampered by cold temperatures.  There was some positive news for supplies with reports that production at Libya’s Sharara oil field resumed yesterday.  Political protests had shut in over 300,000 barrels per day for the last two-weeks. Concerns of poor demand growth still hangs over the market and limited gains on the day as Brent settled $1.50 higher at $80.06 a barrel.  

Markets this morning

GB gas demand remains subdued due to the milder temperatures and strong performance of wind generation in the power stack. The National Grid has forecast demand for today at 256mcm and supplies are showing a slight surplus.  The NBP prompt has not traded but the futures market is open, and prices have firmed slightly.  The front month is 1.30p up at 68.21p while the Summer-2024 contract last traded at 69.50p, up 1.47p.  Carbon prices have moved higher in early trading while crude oil prices are going in the opposite direction with Brent 54 cents down at $79.52 a barrel.