Pricewatch | 07 Feb 2022 | Gas Matters Today

The European carbon price hit a fresh record high on Friday, lifted by the bullish energy complex and increasing permit purchasing by market participants.

The February-dated EUA contract closed 1.2% higher on Friday to settle at EUR 95.97/tonne. The benchmark December 2022 contract closed at EUR 96.45/tonne, having hit an intraday high of EUR 97.5/tonne.

Some market participants expect the European carbon price bull run to continue and top EUR 100/tonne, highlighting strengthening gas, coal and oil prices. The rally is also being driven by some market players looking to break the EUR 100/tonne mark.

Friday saw European gas prices strengthen further, with the March-dated TTF and NBP contracts closing over 3% higher. The Dutch marker settled at the equivalent of USD 27.74/MMBtu – USD 0.59/MMBtu higher than the UK gas benchmark.

Across the pond, US gas benchmark Henry Hub fell by 6.5% despite a cold blast hitting Texas, with production in the Permian basin falling by ~2 Bcf/d last week compared to the previous week. The March-dated Henry Hub contract settled at USD 4.57/MMBtu.

Asian LNG marker JKM continued to climb, closing 4.1% higher at USD 25.35/MMBtu.

As for oil, Brent and WTI hit their highest since 2014, with the April-dated Brent contract up 2.4% to close at USD 93.27/barrel. WTI closed 2.3% higher at USD 92.31/barrel.

The rally was pinned on concerns that the frigid weather in the US could impact oil production – exacerbating supply concerns.

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.