Pricewatch | 18 Aug 2022 | Gas Matters Today

The European carbon price hit a fresh six-month high on Wednesday, with the September-dated contract closing over EUR 3/tonne higher amid strong demand for allowances and limited supply through auctions conduced in August.

The European carbon price has been soaring in August, with the price up ~EUR 15/tonne since the start of the month.

Wednesday’s rally was pinned on strong demand for emissions allowances – namely due to rising coal-fired power generation in Europe – coupled with lower supply of allowances through auctions conducted this month. The carbon price is approaching record levels set in Q1’22, with the price settling at EUR 95.4/tonne on Wednesday.

Soaring carbon, gas and coal prices have helped push European power prices to record levels in recent days.

As for gas, prices on both sides of the Atlantic dipped on Wednesday but remained largely stable.

The Dutch and UK gas benchmarks fell by 0.1% and 1% respectively on Wednesday.

Across the pond, US gas benchmark Henry Hub fell 0.9% but remained in the USD 9/MMBtu range.

As for JKM, the September-dated contract remained unchanged amid the contract's settlement on Wednesday.

Crude prices recovered after hitting a six-month low on Tuesday, with Wednesday’s rally prompted by a larger-than-expected withdrawal from US crude inventories last week.

Brent and WTI closed 1.4% and 1.8% higher respectively on Wednesday.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.