Carbon prices have edged higher in early trading

Prompt gas prices fell by an average of a penny per therm

Above normal temperatures and strong wind generation levels saw demand on the UK gas system fall for a third consecutive day. The system was again well-supplied with demand remaining below 250MCM throughout the day. Early gains on the UK gas market were reversed as the day progressed and prices moved lower across the board. Prompt gas prices fell by an average of a penny per therm while the front month and Q2 21 eased by 0.68p and 0.49p respectively. Seasonal contracts for Summer 21 and beyond recorded more modest losses averaging 0.30p.  

GB baseload power futures shed premium again on Wednesday

GB baseload power futures shed premium again on Wednesday as gas and carbon prices eased for a third consecutive day on Wednesday. The front month shed 31.22 and Q2 was down by £0.95/MWh but losses further out the curve were marginal. EUA carbon prices fell by an average of 75 cent to settle in a range between €38.00 and €39.00 per tonne. The day ahead contract retained the losses of the previous day to finish at £47.94/MWh. Wind generation rose again to contribute 30% of power demand and is forecast to remain strong for the remainder of the week.  

The bullish trading pattern on the oil market continued for a fourth consecutive day

The bullish trading pattern on the oil market continued for a fourth consecutive day on Wednesday with Brent crude gaining a dollar to settle at $64.34 a barrel. The U.S. benchmark, West Texas Intermediate, gained 70 cents to settle at $61.14 a barrel amid concerns for both production and refining capacity due to the severe weather conditions in Texas and the Mid-West. Weekly inventory data will be available from the Energy Information Administration in the U.S. today, a day later than normal due to the holiday weekend in the States. Rumours of a move by Saudi Arabia to increase production may stall the recent rally in oil prices and this may not be clarified for at least another week.  

Crude oil continues to strengthen steadily

As gas and power demand remain well below the seasonal norm for today, the UK gas system is comfortably supplied once again. Wind generation is topping gas-fired generation on the GB power stack, providing just over 30% of demand this morning. Prompt gas products have yet to trade but the front month has gained 1.69p in early trading, clawing back some of the steep losses of the past week. Crude oil continues to strengthen steadily with Brent up a further 46 cents overnight to trade at $64.80 a barrel. Carbon prices have edged higher in early trading with EU allowances moving above €38.50 again.