On Friday prices increased due to the increased tensions in the Red Sea, as mentioned last week. This is illogical because we have good stocks, and just because it takes a little longer to get to us the incremental cost increase is not that great by going around the Cape.
Our view remains that the market will drop although there will undoubtedly be times, such as this, when there will be increases.
| Gas: Gas market prices rose at the end of last week. An escalation of conflict in the Middle East combined with the increased demand for Gas fired generation as colder temperatures took hold in the UK, saw prices rise across all contracts. Power: Gains throughout the Gas market influenced power prices last Friday. Temperatures are expected to be 3°C below seasonal average over this next week. Half of the UK’s nuclear reactors are currently offline for maintenance, with total offline capacity at 3.1GWs. Oil: Oil prices rose last Friday following the increasing conflict in the Middle East, specifically in the Red Sea as the UK and US move to protect shipping lanes in the Suez Canal. Concerns rose around the route “Strait of Hormuz”, which 20% of the global oil supply passes through. Chinese exports also rose 2.3% adding further bullish sentiment. Carbon (EU ETS): The ICE Dec-24 fell further to €65.81/t on Fridays close. Opening at €66.00/t this morning, the contract is now trading at €65.09/t. Carbon (UKAs): The ICE Dec-24 fell to £36.14/t last Friday. The contract is currently trading at £34.80/t. |
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