Crude oil futures resumed their climb on Thursday, continuing the trend of the past three weeks that has seen them decisively break out of the narrow range they were trading within as 2024 came to a close. European natural gas, by contrast, continues to fall, following the cessation of Russian pipeline gas supplies through Ukraine. European coal prices have plummeted along with gas.
The March Brent crude contract closed up 1.0% yesterday, from USD 76.16/barrel on Thursday to USD 76.92/barrel, reversing most of the fall in the previous trading session and taking the price close to the recent high of USD 77.05/barrel.
The contract breached USD 78.80/barrel in early trading on Friday, putting the USD 80/barrel threshold within sight.
WTI is moving in tandem with Brent, up 0.8%, from USD 73.32/barrel to USD 73.92/barrel and trading at USD 75.67/barrel on Friday morning.
In continental Europe, the February TTF natural gas contract lost another 1.4%, falling from USD 13.78/MMBtu to USD 13.58/MMBtu (EUR 44.99/MWh).
In the UK, NBP followed suit, down 1.4%, from USD 14.10/MMBtu to USD 13.89/MMBtu (112.93 p/therm).
In Asia, the JKM LNG benchmark remains much less volatile than prices in Europe or the US. It edged down by 0.2% to USD 14.19/MMBtu, widening the TTF-JKM spread to USD 0.61/MMBtu.
Europe’s API2 coal benchmark fell by 3.0%, from USD 4.32/MMBtu to USD 4.19/MMBtu, its lowest close since July 2023.
On fire
In the US, where headlines continue to be dominated by the apocalyptic wildfires of recent days in and around Los Angeles, Henry Hub gas was up 1.4%, from USD 3.65/MMBtu to USD 3.70/MMBtu.
The death toll from the fires has risen to ten people and thousands upon thousands of homes have been destroyed.
The role of climate change in the severity of the fires is underscored by today’s news from the European Copernicus Climate Change Service (CS3) that globally 2024 was the hottest year on record, at 1.6°C above pre-industrial temperatures. This makes 2024 the first calendar year during which average global temperature exceeded 1.5°C above pre-industrial levels.
“Human-induced climate change remains the primary driver of extreme air and sea surface temperatures,” said CS3, “while other factors, such as the El Niño Southern Oscillation (ENSO), also contributed to the unusual temperatures observed during the year.”
CS3 director, Carlo Buontempo, added: “All of the internationally produced global temperature datasets show that 2024 was the hottest year since records began in 1850. Humanity is in charge of its own destiny but how we respond to the climate challenge should be based on evidence. The future is in our hands – swift and decisive action can still alter the trajectory of our future climate.”
The planet is now on the cusp of exceeding the 1.5°C stretch target in the Paris Agreement, which based on a 20-year average. The average of the past two years is already above this level. Moreover, each of the past 10 years (2015-2024) was one of the 10 warmest years on record.
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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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