Both gas and electricity prices rose more markedly on Wednesday, but we are not concerned and remain of the opinion that the underlying trend is for prices to drop.
Current spot prices are in excess of 10% lower than the Winter ’24 current prices. That has dropped back from a gap of over 20% less than a month ago, and we expect Winter ’24 and Winter ’25 gas and electricity prices to align themselves more closely with the Summer pricing going forward.
|Gas: Short supply pressurised NBP prices yesterday, counteracting the mild, wet, and windy weather that we are experiencing. Day ahead prices below the front month encouraged net injections into British storage leading to the grid being 10mcm short.
Power: Bullish Carbon and NBP gains supported rising Power prices yesterday. Despite above seasonal norm wind production forecast through week 5, week ahead prices gained in value. Power demand throughout January so far has averaged 37.4GW/day, 1.7GW/day above the same period last year.
Oil: A reduction in US inventories pressured Crude prices yesterday afternoon, whilst news of further aid for businesses in China added further upside. The ECB meets today where it is expected to keep interest rates the same.
Carbon (EU ETS): The ICE Dec-24 closed at €65.82/t yesterday. This morning the contract is trading at €64.98/t at the time of writing.
Carbon (UKAs): The ICE Dec-24 gained yesterday, closing at £35.25/t. Opening slightly lower this morning, the contract is currently trading up at £34.85/t.
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