Carbon EUAs are down by around 20 cent per tonne this morning

Gas Market

The early gains to near futures on the NBP curve yesterday morning were stretched out to just over 2.00p per therm but then prices contracted.  The gains were pared back with most remaining summer month contracts trading below Tuesday’s close. Prices oscillate to the end of the session leaving the near curve to settle flat as June closed at 72.02p.  GB gas demand was slightly higher than in recent days due to the lower wind generation but there was ample gas supplies available to meet the day’s demand of 177mcm while exports through the interconnectors amounted to 33mcm. LNG send out remained sluggish while nominations through the Langeled feeder from Norway ran at around 85% of capacity yesterday. Despite the system’s comfort, the Spot closed 1.95p higher while the Day ahead product added just 0.80p.

Power Market

The late switch in direction to the NBP curve partly fed into baseload futures on Wednesday while lower carbon prices also added pressure to longer curve contracts. June settled £0.28/MWh higher at £65.00/MWh while the Winter contract closed flat. Carbon EUAS traded in a tight range yesterday with some investors taking advantage of the recent declines to close out positions.  The Dec-24 contract for EUAs traded between €69.41 and €71.77 per tonne before closing down at €69.14 per tonne. Wind generation stayed below the season average yesterday, however solar picked up on recent days to almost 6.0GW yesterday. Prompt prices held the early increases from the morning and baseload for the Day ahead settled at £72.33/MWh.

Oil Market

Crude oil prices rallied late in the session after the Energy Information Administration reported a 2.5m barrel draw in U.S. crude oil stocks. Prices edged down after the latest release from the International Energy Agency provided some food for thought for the crude oil markets.  The Paris based agency shortened its forecast for oil demand growth this year.  The IEA revised the 2024 oil demand growth to 1.1 million barrels per day, which is down 140,000 bpd from their previous estimate and over 1m barrels below OPEC’s forecast.  Cracks in the OPEC+ group may be starting show as Kazakhstan is believed to be looking to increase its crude oil output ahead of the June members capacity review meeting.  The review meeting at the end of June is likely to set the baseline for each member to be used for any future production cuts.  

Markets this morning

GB gas demand is muted this morning at 145mcm while supplies are forecast 24mcm long.  Norwegian flows have stepped up after planned maintenance works and the Langeled line has nominations of 64mcm for today.  In the gas markets, trading for the prompt has yet to get going but NBP futures have opened lower. The front month is down over a penny at 71.65p while the Winter-2024 contract last traded at 91.60p, which is 1.05p down on Friday’s close.  Carbon EUAs have continued to weaken this morning while in the crude oil markets, Brent is slightly higher at $83.12 a barrel.