UK Power Pricing Trends | 9 April 2021
Spot power prices rallied substantially last week as below seasonal-average temperatures and low renewable generation underpinned a bullish, short-run market dynamic. Carbon EUAs rose to a new record price in midweek and, despite paring some gains into Friday, continued to support forward power contracts. Sentiment, bolstered by the imminent easing of travel and trade restriction, remained bullish and continued to support short-end power contracts disproportionately – pulling the forward curve deeper into backwardation.
UK Natural Gas Pricing Trends | 9 April 2021
Average temperatures across the U.K. fell by half Friday-to-Friday and dropping to as low as 3°C in midweek. Consequently, average daily heating demand rose 30% week-on-week, lending substantial support to spot prices. A steady rise in Norwegian gas flows into the U.K. throughout the week did help temper spot market gains, however. On the forward curve, the support to gas pricing provided by the bullish, intraday dynamic was nullified by a strong and still-expanding LNG supply outlook – a further 13 LNG shipments were expected to dock at U.K. terminals by month-end.
UK Energy Complex | 9 April 2021
The EU ETS’ allowance surplus increased 14.2% to 1.39bn as emissions fell sharply last year. Despite the apparent supply glut, carbon EUAs continued their rise to notch a record high €44.25/tonne on Tuesday – supported by strong speculative interest and dip-buying from emitters ahead the April 30th compliance deadline. Meanwhile, oil benchmarks retreated as the market weighed a slew of positive U.S. economic data against OPEC and its allies’ gradual tapering of existing output curbs, in addition to the prospect of additional supply from Iran.
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