EUA carbon markets are in retreat this morning

The gas market traded in negative territory for the day

High winds across the UK and Ireland as a result of Storm Eunice provided both an update and downside for gas markets during Friday.  The windy conditions proved to be ideal for renewable generation and limited gas to power demand. The gas forecast for the day came in at 264MCM and the system ran with a surplus of 17MCM.  On the downside the stormy condition did prevent the docking of LNG tankers but the outlook for LNG remains positive.  The gas market traded in negative territory for the day with losses oscillating between 3.00p and 7.00p.  The market was down by 3.00p on average at the close with the five-day accumulated loss coming in a 10.00p per therm.

Wind generation continues to provide significant levels of power

Stormy conditions and milder temperatures over the past number of days have provided an unexpected boost to the UK power system.  Supply margins have stayed wide as wind generation continues to provide significant levels of power to the grid and keeps thermal generation off the stack.  Day ahead power costs reduced as a result with £19.00 coming out of the contract.  On the power curve prices posted modest gains as carbon input costs firmed.  These gains were modest as lower gas costs kept a lid on the market.

Crude oil markets were rangebound on Friday

Crude oil markets were rangebound on Friday with prices increasing by 57 cents as the expectation of additional Iranian supply have to some extent countered tensions in Eastern Europe between Ukraine and Russia.  The crisis rumbles on but there has been a chink of light on the diplomatic front as Russian foreign minister Sergei Lavarov agreed to meet US secretary of state Antony Blinken subject to the caveat that Russia does not invade.  This would appear to have bought some time and global crude markets calmed as result.  At market settlement the Brent crude contract for April delivery was priced at $93.54 a barrel, 57 cents higher than the previous session.

The UK gas market is in retreat this morning

The UK gas market is in retreat this morning as the focus remains firmly on the positive supply/demand balance.  Forecast demand for today is coming in at 269MCM and while supplies are 5MCM short, the market is not overly concerned.  The front month March contract opened at 167.00p but has last traded at 171.80p, 4.69p down from Friday’s close.  The Summer 2022 contract is coming under sustained pressure and has already shed over 9.00p as it trades at 166.07p per therm.  EUA carbon markets are also in retreat and have given back half the gains added during Friday’s session.  The Brent crude contract is flat to its last close at $93.52 a barrel.

 

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