Soaring carbon prices pressures wholesale market
Gas prices rebounded at the NBP on Thursday amid soaring carbon (EUA) prices and unplanned offshore maintenance.
After a series of bearish sessions, substantial gains were posted on both the front-month and front-season contracts, with increases of nearly 4p/therm (0.14p/kWh) and 3p/therm (0.10p/kWh), respectively. Surging carbon prices likely served as a key source of support at the front end, the Carbon EUA (EU Allowance) December 24 benchmark contract saw daily upside of 4.8%, coinciding with bullish moves across European gas, oil and coal markets (data from ICE).
Unplanned maintenance in both the UK and Norway may also have played into the bullish sentiment. According to data form National Gas (REMIT), an offshore issue has taken the UK’s Barrow gas treatment plant offline since 5th October, removing 6mcm/d of supply with an uncertain duration. Furthermore, compressor issues at both the Gullfaks and Troll fields removed a total of 17.1mcm/d Norwegian export capacity, both also with an uncertain duration (data from Gassco).
This morning, gas prices have softened slightly, with the December 24 front-month contract currently being offered circa 1p/therm (0.03p/kWh) below its previous settlement at time of writing.
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Price commentary courtesy of Crown Gas and Power 