Stronger dollar impacted on commodity and equity markets

UK NBP gas market displayed quite an amount of volatility

The UK NBP gas market displayed quite an amount of volatility on Monday following a week long streak of gains in the previous week. Prices were edging lower in the early part of the session but quickly gained a penny on some frantic trading in the late morning. However, the push higher was not to be sustained and a quick sell off occurred during the afternoon session. Case in point being the front month April contract which traded at a low of 44.94p/therm before pushing to a high point of 48.48p/therm, a spread of 3.54p. At market settlement this contract was priced at 45.29p, 2.21p lower than the previous settlement.  

Carbon prices moved away from record highs

With gas markets given up gains across the baseload power market followed suit. Power prices moved lower across the board in line with losses in gas, crude oil and carbon. Carbon prices moved away from record highs with EU ETS unit prices finishing in a range between €42.30 and €43.20 per tonne. Wind continued to supply a considerable amount of GB power demand, outstripping gasfired generation once again. Day ahead power shed over £10.00 as the price moved to £56.65/MWh. Volatility in the day ahead price looks set to continue as weather conditions vary in the coming days.  

 Crude oil prices declined on Monday

Crude oil prices declined on Monday as a stronger dollar impacted on commodity and equity markets. At one stage in overnight trading, it appeared crude was testing a new high not seen in nearly two years. However, weakness entered the market when it emerged that several European countries were experiencing significant rise in COVID‐19 cases. The potential for a third wave of infections in Europe has dampened the optimism on demand growth and fuelled some more negative sentiment about a quick economic recovery. At market settlement the Brent crude contract for May delivery was down by 34 cents at $68.88 a barrel.  

Crude oil and carbon markets are in retreat this morning

The UK gas system is displaying considerable length this morning as supplies outstrip demand by some 24MCM. This comfortable supply position is being reflected in both the prompt and futures gas market where prices are trending lower. The spot and day ahead contracts have shed 1.30p and 1.55p respectively thus far. On the NBP futures market the front month April contract is priced at 43.83p/therm, down by 1.46p from last night’s close. Other contracts that have traded are down by a penny. Crude oil and carbon markets are also in retreat this morning. Crude is moving lower for the third session in a row and has already lost $1.17 as it trades at $67.71 a barrel.