Carbon prices gained to settle at new record high levels

The day ahead contract gained a penny but movement on the prompt market was otherwise mixed.

UK gas prices gained for a second consecutive day on Friday, but it was not enough to overcome the sharp losses of earlier in the week and near futures prices finished lower week-on-week. Futures contracts at the NBP recorded uniform gains averaging 0.60p on the day. The front month was down almost 5.00p over the week however contracts beyond the front summer did record weekly gains averaging 1.28p. With much colder weather forecast for this week, the day ahead contract gained a penny but movement on the prompt market was otherwise mixed.  

  Baseload futures power contracts gained for a second consecutive day

Baseload futures power contracts gained for a second consecutive day and all, but the front month finished higher week-on-week. Rising gas prices combined with another surge in carbon prices drove the power market higher. Carbon prices gained by almost €1.00/tonne to settle at new record high levels of €38.15 to €38.75 per tonne. The day ahead contract gained £7.00/MWh with demand forecast to rise sharply as cold weather sets in over the weekend. The increase in the day ahead price might have been greater but for a forecast for strong wind generation on Monday and indeed for the first half of this week.

 Carbon prices gained by almost €1.00/tonne

Optimism arising from Covid-19 vaccination programmes and the imminent roll-out of a new stimulus package for the U.S. economy, saw crude oil prices complete a run of 7 consecutive days of gains. West Texas crude settled at $56.85 a barrel, its highest level in over a year. Brent crude was up by 50 cents on the day and $3.46 week-on-week to settle at $59.34 on Friday. Last week’s agreement between OPEC, Russia and other large producers to continue with the current production restrictions, helped maintain the upward momentum on the market. Carbon prices gained by almost €1.00/tonne to settle at new record high levels of €38.15 to €38.75.

 

Crude oil is also on the rise with Brent crude breaking above $60.00 a barrel for the first time in over a year

This week’s market opening is a mirror-image of last Monday when UK gas prices fell heavily. Today the market has opened sharply higher with prompt gas prices up by as much as 7.10p. A big increase in gas demand due to sub-zero temperatures is the main driver of market movement this morning. Despite a robust supply-side response and strong wind generation levels, overall demand has risen to 390MCM with forecast deliveries running at 394MCM. Spot and day ahead prices are up by 6.60p and 7.10p while the surge extends to the front month price which is up by almost 5.00p. Crude oil is also on the rise with Brent crude breaking above $60.00 a barrel for the first time in over a year.