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A soft demand/supply complex drove short-term contract prices downwards towards the back end of last week. This move was a consequence of increasing levels of wind generation, higher temperatures, higher solar generation levels and lower national demand forecasts as the country headed into a bank holiday weekend. Early signs this morning are that some price correction is taking place.
Temperatures are expected to cool somewhat and with Russian gas flows into Western Europe dropping by over 15% over the course of the weekend, some upward impetus has bolstered short term pricing.
A strengthening wider commodity mix added some bullish sentiment to prices further along the curve. Indeed, the Brent Crude Oil price is one such benchmark that has held onto previous gains. The demand picture for Oil continues to improve as global lockdown gradually eases, boosting forecasted demand levels for the commodity.
This, coupled with suggestions that OPEC+ and the US are continuing to restrict production levels effectively has improved the price outlook even further. EUA Carbon also held comfortably above the 21 Euros/tonne level, responding to gradually increasing European energy demand. Naturally, headlines remain focused on Dominic Cummings’ movements and his much debated breach of lockdown rules.