Crude oil futures advanced on Tuesday, with prices approaching pre-coronavirus levels, continuing to be supported by last week’s surprised decision by Saudi Arabia to cut production by about 1m bbl/day in February and March.

 

Hence, Brent crude rose by 92 cents, or 1.7%, to settle at $56.58 a barrel. At the same time, U.S. WTI crude gained 96 cents, or 1.8%, to end at $53.21. Both contracts finished at their highest level since February 21.

 

British near-term gas prices escalated on Tuesday on the back of persistend cold weather and weaker LNG supply as a result of higher Asian Asian spot LNG prices. As a result, NBP spot rallied by 17.5% to 79.00 p/therm.

Along the forward curve, the gas price for year-ahead delivery increased by 1.4% to 45.26 p/therm, tracking bullish oil and carbon markets.

European spot electricity prices diverged on Tuesday, with the German day-ahead power tumbling by 7.9% to 42.47 EUR/MWh amid stronger renewable generation. Meanwhile, the French equivalent power contract rocketed by 16.2% to 73.85 EUR/MWh amid cold weather.

Year-ahead power prices gained ground, buoyed by a strong energy complex. Consequently, the German Cal’22 power increased by 2.3% to 51.77 EUR/MWh, while the similar contract in France ended at 53.05 EUR/MWh, posting a 2.1% gain day-on-day.

A looming blast of colder weather across Europe and scarce supply drove the European carbon prices on Tuesday. EUAs expiring in 2021 rose modestly by 0.4% to 34.66 EUR/tonne.