Pricewatch | 31 Aug 2021 | Gas Matters Today

The European carbon price hit a record high on Monday, pushed higher by a curtailment of auctioned allowances coupled with strengthening energy markets.

The carbon price broke into the EUR 60/tonne barrier for the first time ever on Monday, with the September-dated EUA contract closing at EUR 60.72/tonne and the benchmark December 2021 EU Allowance futures contract closing at EUR 60.76/tonne to start the week.

Prices in August have been pushed higher by a reduction in supply of EUAs from government auctions.

The carbon price has also been supported by bullish energy markets, with European gas prices hitting a fresh seasonal high on Monday. The front-month TTF and NBP contracts – which rolled over to October on Monday – closed at USD 17.72/MMBtu and USD 16.87/MMBtu respectively to start the week.

Across the pond, US gas benchmark Henry Hub fell from a 32-month high on Friday, closing 1.5% lower at USD 4.31/MMBtu. Prices dipped on reports suggesting oil and gas operations along the US Gulf of Mexico were largely unscathed following Hurricane Ida which made landfall in Louisiana on Sunday as a Category 4 hurricane – the strongest storm to hit the Gulf Coast since Hurricane Katrina 16 years ago.

On Monday, the US Bureau of Safety and Environmental Enforcement (BSEE) said ~94% of US Gulf of Mexico oil and gas production remained shut-in. However GoM production accounts for ~5% of US gas supply and 17% of total oil supplies.

As for gas prices in Asia, CME’s JKM futures contract made it seven days of gains after rallying by 0.1% to close at USD 17.72/MMBtu.

Crude prices rallied on Monday, pushed higher by potential supply tightness in the US caused by Hurricane Ida – which has shuttered Gulf Coast refineries and processing plants.

US oil benchmark WTI closed 0.7% higher at USD 69.21/barrel, with Brent up 1% to close at USD 73.41/barrel.

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.