Wholesale gas and electricity prices rose significantly on Monday with both Winter 24 and Winter 25, now above 80p/thm for gas.
Gas continues to be more volatile than electricity. The reason for this is that wind generated power, softens the impact of increased gas prices in relation to energy production.
The gas increases are due to unplanned Norwegian outages and our view therefore remains that the market fundamentals are strong, that this is trader driven activity to minimise their losses and that prices will resume their downward trend in the near future.
| Gas: NBP contracts gained throughout the curve during yesterday’s session. Prices were spurred on by unplanned Norwegian outages and gains within oil contracts. The grid was long yesterday by 3mcm, and temperature forecasts were revised upwards, helping to keep a cap on price uplift. Power: During yesterday’s session, power prices held on to the bullishness found at the end of last week, supported by rising NBP contracts. Gains in key UKA carbon contracts pressured contracts on the curve. Wind forecasts over the remainder of week 12 and throughout week 13 have been revised upwards and are well above seasonal average. Oil: Oil prices have rallied with increased risk premiums added to contracts, bolstered by Ukraine drone attacks on Russian oil refineries. Economic data out of China yesterday was mixed, with a growth in production, but a drop in retail sales. Carbon (EU ETS): The ICE Dec-24 closed at €61.43/t last night. Opening similar this morning, the contract reached €62.80 before dropping back to €61.45/t at the time of writing. Carbon (UKAs): The ICE Dec-24 gained during yesterday’s session, closing at £37.92/t. this morning the contract opened at £38.00/t but has since fallen to £37.31/t. |
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