Bad news all around this morning as expected….it will die down so unless you can either accept a contract at pre increase prices or absolutely have to sign today/tomorrow our advice is to hold off.
Expect further volatility in the days ahead driven by gas price movements
Gas: Gas prices rose throughout the near curve yesterday. British demand for Gas was forecast to rise by 7%, with the return to average generation from renewables, after enjoying a period of above average output. Prices were further inflated due to strikes at Australia’s LNG facilities, increasing global competition. Maintenance at Dragon LNG Terminal and Bacton gas field supported further gains. The UK does not currently expect any LNG cargoes, adding to the bullish factors.
Power: Power prices shadowed the gains in the wider energy complex. Front curve Gas demand and rising oil prices were the main factors. Wind Power has averaged a 7.8GWs a day in August, which is a 3GW increase from August 2022.
Crude: Oil prices continued to rise yesterday amongst a tighter supply outlook and potential disruptions as the Ukraine/Russian war escalates. Ukraine has threatened to retaliate against Russian ships blocking Ukraine’s ports. Saudi Arabia and Russia are continuing their production cuts through OPEC+, reducing production by 2m barrels/day between them.
Carbon (EU ETS): The ICE Dec-23 closed at €83.95/t yesterday. Today it opened at €84.13/t but has since fallen to €83.35/t at the time of writing.
Carbon (UKAs): The ICE Dec-23 continued its bearish run and closed at £39.96/t yesterday. Opening at £39.8/t but is currently trading at £39.59/t at the time of writing.