The European carbon price hit a record high on Wednesday, with the rally pinned on high gas prices and limited permits.
The February-dated EUA contract closed 5.1% higher on Wednesday to settle at EUR 93.69/tonne. The benchmark December 2022 contract settled at EUR 94.21/tonne.
Strengthening gas prices have helped lift carbon prices as utilities are turning to cheaper coal to produce electricity – a move which is prompting power producers to consume more carbon permits.
Wednesday saw European gas prices stage a recovery after a hefty drop on Tuesday.
The March-dated TTF and NBP contracts posted gains of ~2% on Wednesday, with the Dutch marker settling at the equivalent of USD 25.61/MMBtu – USD 0.66/MMBtu higher than the UK gas benchmark.
A slump in gas flows from Russia helped lift gas prices on Wednesday.
Across the pond, US gas benchmark Henry Hub hit a four-day high, settling 15.8% higher at USD 5.5/MMBtu. Forecasts showing colder weather for much of the US over February helped lift prices on Wednesday.
Asian LNG marker JKM rebounded on Wednesday, closing 2.1% higher at USD 24.2/MMBtu.
Oil prices ticked higher on Wednesday after OPEC and its allies agreed to stick with plans to increase production by 400,000 barrels/d each month through to September.
The April-dated Brent contract closed 0.3% higher at USD 89.47/barrel. The March-dated WTI contract closed 0.1% higher at USD 88.26/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.
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