There were significant gains to carbon prices on Tuesday

06 March 2024

Gas Market

The early gains to NBP futures were partially reversed over the afternoon on Tuesday leaving near months an average of 1.30p per therm higher day-on-day. The near curve has gained over 8.00p over the last week with as cooler temperatures combined with buying activity in response to price triggers while concerns of lower LNG imports have also added support. The April contract traded between 66.22p and 72.08p before settling at 68.70p. Wind generation has been revised lower for the remainder of the week, which could add to demands on the gas system, however, temperatures may be higher than forecast next week.  Prompt prices consolidated Mondays gains and the Spot and Day ahead settled 3.50p and 2.30p higher respectively.  

Power Market

Baseload futures continued to track the gas and carbon markets yesterday as April settled £2.10/MWh higher at £63.85/MWh.  The Summer-2024 contract posted a similar increase and settled at £64.15/MWh bringing the gains over the last week to £5.65/MWh.  Prompt prices edged higher on the day as three nuclear reactors remain offline due to outages while wind generation is forecast to decline. Carbon prices increased on Tuesday spurred on by increased buying activity and both EUAs and UKAs posting significant gains.  The Spot for EUAs settled at €58.16 per tonne gaining just shy of €3.00 while UKAs settled 4.9% or £1.70/ tonne higher.  

Oil Market

Demand concerns continued to pressure crude oil prices on Tuesday as the global benchmark, Brent, fell by 76 cents a barrel.  Prices were flat earlier in the session as markets digested the latest stimulus plan from China. The Premier Li Quang set a target of 5% growth in the economy for the world’s second largest oil consumer this year, but the markets remained unconvinced yesterday and a weaker dollar and the global geopolitical unrest prevented further losses on the day.  There are also demand concerns in the U.S. and the market will watch on Wednesday for the weekly oil report from the Energy Information Administration to see if there has been any improvement over the last week.

Markets this morning

It looked as though the late downward trend in NBP futures would continue this morning as the front month opened at 68.25p and dropped to 66.58p but the market has since switched direction. The April contract last traded at 71.23p which is 2.53p above last nights close.  The remaining summer months are now all showing gains above 2.00p while the Winter-2024 is 1.60p up at 83.08p.  Carbon EUAs have ticked up in early trading with contracts out to 2025 an average of €1.20 per tonne higher.  Brent for May delivery has also firmed and is 62 cents up at $82.66 a barrel.