Prices continued to drop on Wednesday, as expected after the sharp increases seen on Monday.
For electricity W23 is now above £100/MWh at £107.80 on a par with W25. W24 is still higher at £120.11/MWh but as that drops back we will see lower pricing on longer term contracts. With the current unseasonally mild weather & European gas storage at 95%, coupled with a blustery Storm Agnes & it’s aftermath, the underlying indicators are very good at present. Gas is similar with W23 & W25 almost on a par, but W24 higher.
While W24 remains higher than 23 & 25 our advice remains to sign contracts that don’t include W24 until next summer.
Gas: NBP contracts seen losses again yesterday as Norwegian pipeline capacity increased again, whilst overall demand remained below seasonal. European storage capacity is currently sitting at 95%, this is helping to counteract ant fears over Norwegian maintenance and supply shortage.
Power: Power prices mirrored movement in NBP far curve contracts yesterday. Strong wind generation added further pressure to the day ahead contract. High wind output is forecast to continue for the next couple of weeks, reducing the need for any gas for power demand.
Crude: Oil prices gained for the third day in succession, tight supply helped the price along with sentiment that the US economy will remain healthy.
Carbon (EU ETS): The ICE Dec-23 closed at €82.29/t yesterday. The market opened softer this morning at €82.10/t and is trading at €82.22/t at the time of writing.
Carbon (UKAs): The ICE Dec-23 closed at £36.27/t last night. The contract is currently trading at £36.60/t at the time of writing.