Carbon prices reversed following recent gains

 UK NBP gas futures settled significantly lower on Thursday

UK NBP gas futures settled significantly lower on Thursday with nearly 3.00p of premium coming out of contracts.  This downward movement, while welcome, did not come about easily as a mid-day rally saw some contracts move into positive territory.  The market on Thursday displayed significant volatility with early weakness being eclipsed by a firmer market during the mid-session.  However, the bears finally won out and contract across the curve declined.  On its final day of trading, the front month June contract traded to a high of 65.61p and a low of 62.00p, a spread of 3.61p, before settling at 62.87p, down by 3.47p from the previous settlement.  

 GB power futures continued to track gas and carbon as prices on the curve turned lower

GB power futures continued to track gas and carbon and prices on the curve turned lower in response to similar moves in these markets.  The front month shed just £2.98 while Q3 and Q4 lost £1.80 and £3.10 respectively. Having made gains throughout the week it was refreshing to see prices follow the weaker energy complex lower. Carbon prices also reversed track following recent gains with EUA’s shedding €1.84 per tonne on average.  The day ahead baseload price gained £1.00 as wind generation levels remain muted.  Conditions are not expected to be favourable for wind in the coming days resulting in higher demand from conventional sources.  

Crude oil prices traded higher during the session on Thursday

Crude oil prices traded higher during the session on Thursday as the gradual creep up in the market continued.  The market traded in a range of just over a dollar with the low coming in at $68.51 while the high point was reached later in the session at $69.61 a barrel.  Crude oil has firmed for the last number of session although the gains in the previous three sessions have been modest.  However, crude has still added $4.36 over the last five days.  There are a number of competing factors in the markets with optimism on future demand being somewhat stifled by some sluggish global economic factors.  At market settlement Brent closed at $69.47, up by 60 cents.  

 Crude oil markets have firmed further

Forecast UK gas demand has declined day on day and is coming in at 161MCM some 10MCM lower than this time yesterday. The system is extremely comfortable with line pack expected to grow by some 24MCM.  The system comfort comes despite ongoing maintenance on the Forties field in the North Sea.  A significant contribution is coming from Norway with Langeled send out topping 60MCM while combining LNG send out is 73MCM. On the gas market the new front month July contract is down by 0.74p at 60.80p per therm.  Winter 2021 has shed 1.00p in early trading.  Crude oil markets have firmed further as Brent trades at $69.61 a barrel.