The Spot for carbon EUAs fell sharply on Tuesday

03 April 2024

Gas Market 

After the long weekend for the Easter break, wholesale natural gas prices continued to show weakness as the near curve eased.  Early losses of around 2.00p per therm to the front months were pared back but the overall fundamentals pressured the curve over the afternoon and May yielded over 3.00p.  Winter-2024 is the new front season and this contract was also marked lower over the day, closing at 80.63p, down 2.03p. A rise in temperatures dented heating demand on Tuesday and the mild start to April could last into the second week.  Gas demand was 193mcm and supplies ran with a healthy surplus which pressured the prompt.  At the close, the Spot was 3.75p down while the Day ahead product declined by 3.00p.

Power Market

  GB baseload futures came under pressure from lower natural gas futures and a sharp drop in carbon prices.  The May contract settled at £55.40/MWh posting the greatest loss on the day of £3.23/MWh.  The Winter-24 contract declined by £2.28/MWh to £74.73/MWh. Wind generation is forecast to rise above 12.0GW from Wednesday from around 8.2GW on Tuesday and prompt prices softened.  Baseload for the Day ahead settled at £61.50/MWh down £5.18/MWh. The anticipation of the publication of verified emissions data for 2023 weighed on carbon prices yesterday as the report is expected to show another drop in emissions last year. The Spot for EUAs closed at €57.37 per tonne, down €2.72 per tonne.    

Oil Market

Brent moved higher on Tuesday hitting a new five-month high as the June contract took on front month status.  The global benchmark settled at $88.92 a barrel having gained $1.50 a barrel as supply concerns mount.  The Ukraine has continued to launch drone attacks on Russian oil refineries with the most recent target being the Taneco refinery which has a capacity of 340,000 barrels per day although damage was reported to be superficial. Tensions in the Middle East are high after Iran vowed to retaliate after Israel’s missiles struck the Iranian embassy compound in Damascus killing several military personnel earlier in the week.

Markets this morning

Wind generation is exceeding forecasts this morning and has cut GB gas demand back to 180mcm, the lowest for the year so far. Supplies are long by 10mcm, and prompt prices are easing.  The Day ahead last traded 1.60p down at 62.45p while the Spot is flat.  Near months are around a penny lower in early trading with the May contract exchanging at 63.48p.  Crude oil prices are trading in a tight range this morning ahead of the OPEC+ meeting later.  The group is expected to leave its output unchanged. Brent for June delivery last exchanged at $89.06 a barrel, up 14 cents.