Carbon EUA contracts out to 2026 declined by an average of 1.9% yesterday

08 February 2024

renewable energy management

Gas Market

The outages at Troll and Nyhamna were still evident yesterday and are now expected to be repaired by Friday according to the latest information posted on the Gassco website.  While the capacity impacted is lower at up to 16mcm, this curbed losses on Wednesday. NBP futures fell by just over a penny for the most part with March closing at 68.98p, down 1.11p while the Summer-2024 contract settled at 70.04p, down 1.20p. Prompt prices were mixed with the Spot and Day ahead easing by 0.40p while the Balance of month product closed slightly higher.  Temperatures are expected to remain closer to the norm in the short term while forecasts for lower wind generation could raise gas demand.    

Power Market

With carbon EUAs and UKAs falling sharply GB baseload futures yielded more premium on Wednesday.  Modest declines to the NBP curve also weighed on the power curve yesterday as the March contract settled at £64.33/MWh, down £1.30/MWh. The Summer-2024 contract lost £1.50/MWh on the day to close at £63.10/MWh.  Carbon EUA contracts out to 2026 declined by an average of 1.9% or €1.25 per tonne over the day. Baseload for the day ahead moved lower yesterday with wind forecast to pick up heading into the weekend.  Wind generation for the UK was below 5.0GW yesterday but is forecast to rise above 10.0GW for Thursday. The unplanned outage on the Viking Link is expected to be repaired late on Thursday.    

Oil Market

On Wednesday crude oil prices move higher for a third day after the EIA reported a significant draw on U.S. gasoline reserves while geopolitical tensions remain high.  It looked like progress was being made with hopes of another ceasefire in range for the Israel Hamas war but the proposal was rejected immediately by the Israeli Prime Minister, however, Anthony Blinken, the U.S. Secretary of State remains optimistic that a deal can be negotiated. The Energy Information Administration reported a fall of 3.2m barrels in U.S. gasoline stocks for last week, this was significantly more than anticipated, however, the cold weather impacted refinery activity and crude oil reserves grew by 5.5m barrels. Brent for April delivery settled at $79.21 a barrel, up 62 cents.  

Markets this morning

Natural gas futures opened lower this morning, but losses have since been retraced with all contracts now flat.  The front month has traded in a tight range with the low of the morning at 68.30p while the high was 69.79p and the contract last traded at 69.05p. Langeled nominations for the day are 66mcm and this is still below full capacity for the pipeline from Norway.  Prompt prices are directionless so far although a short gas system may provide some upside to the Spot and Day ahead products.  Brent is 24 cents a barrel higher this morning while carbon EUAs are down by around 35 cent per tonne.