European gas hubs corrected sharply on Tuesday after surging over the festive New Year period on forecasts of colder weather. Month-ahead contracts on UK NBP and Dutch TTF fell by more than 9% to close yesterday’s session at the equivalent of USD 7.36/MMBtu and USD 6.49/MMBtu, respectively. NBP rose 30% between 18 December and 4 January 2020, while TTF gained 25% over the same timeframe.
The Asian LNG spot price made further gains yesterday after a barn-storming bull run over the Christmas and New Year break. CME’s JKM futures contract, a financial hedging instrument against JKM, yesterday rose 1.2% to USD 15.11/MMBtu. US gas benchmark Henry Hub rose 4.7% to USD 2.70/MMBtu following reports of a cold weather front plunging temperatures on the eastern seaboard.
Oil prices rose strongly yesterday and continued their ascent on Wednesday morning after Saudi Arabia announced voluntary additional production cuts of 1 million barrels/d in February and March, while most other OPEC+ producers will hold production steady in a bid to balance the market during intensifying Covid-19 lockdowns. Brent and WTI futures both rose 4.9% to close at USD 53.60/barrel and USD 49.93/barrel, respectively, and both were trading around 1% higher on Wednesday morning.
The European carbon price yesterday fell back by 2.1% from its latest all-time high of EUR 33.56/tonne, closing the session at EUR 32.84/tonne.
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 reserved.