UK & European Energy Market Snapshot…

Daily (11.10.2023): British gas prices saw a fierce uptrend on Tuesday amid supply concerns over Middle East tensions

Crude oil prices were slightly lower yesterday amid concerns over the state of the global economy, after recent data flagged a slowdown in economic growth. However, the oil market remained choppy amid Middle East turmoil, fuelled by worries about a potential decrease in oil supply. As a result, Brent crude traded 0.6% lower at $87.65 a barrel. Meanwhile, U.S. WTI crude edged 0.5% lower at $85.97 a barrel.

British near-term gas prices continued their rise on Tuesday due to concerns over supply prompted by violence in the Middle East, possibility of renewed LNG strike in Australia and colder weather forecasts. Hence, NBP spot jumped by 16.7% to end at 110.90 p/therm. Along the forward curve, the gas price for Sum-24 soared by 8.9% to 130.00 p/therm, in tandem with bullish energy complex.

Spot electricity prices in Europe evolved differently on Tuesday. The German day-ahead power price tumbled by about 47% to end at 59.79 EUR/MWh due to increased wind and solar generation. At the same time, the French equivalent contract dipped by about 26% to 78.88 EUR/MWh amid temperatures above seasonal norms.

On the other hand, front-year electricity prices gained ground yesterday, tracking a bullish gas and carbon market. The German Cal’24 power contract surged by 6.4% to end at 130.72 EUR/MWh. The similar contract in France soared by 6.2% to 137.19 EUR/MWh.

European carbon prices extended their gains on Tuesday due to the surge in gas prices, which led speculative investors to cover their short positions in EUAs. EUAs expiring in Dec-23 soared by 3.8% to 84.82 EUR/tonne.