The crude oil market has moved higher

 UK gas market resumed its upward trajectory

The UK gas market resumed its upward trajectory on Wednesday as the short to medium term supply outlook remains poor.  The return of the Nord Stream 1 pipeline from maintenance on Friday should see some relief for Western European markets but storage levels remain worryingly low, suggesting that the front winter will retain much of the premium gained over the past 2 months.  Near futures prices gained an average of 2.00p with all but the front month settling above 90.00p.  Prompt gas prices also gained over 2.00p despite the UK gas system running in surplus throughout the trading day.

GB power market tracked gas prices higher

The GB power market tracked gas prices higher with additional support coming from rising oil and carbon prices on Wednesday. The front month recorded the strongest gain of £3.35/MWh with wind availability forecast to remain weak and imports from France adding premium to GB prices. Day ahead and week ahead prices also gained significantly yesterday as wind generation is forecast to remain low to the end of the month.  Wind generation for today is not expected to reach 200MW but solar power is forecast to exceed 3GW.

Crude oil rallied on Wednesday

Crude oil rallied on Wednesday with Brent crude gaining 4% to trade above $70.00 a barrel again.  Having shed almost $5.00 to settle at an 8-week low of $68.62 on Monday, the global benchmark recovered slightly on Tuesday and moved strongly higher to settle at $72.23 a barrel on Wednesday.  Weekly inventory data from the U.S. Energy Information Administration showed a rise in crude oil stocks but a modest drop in gasoline stocks which cancelled each other out as market drivers.  The U.S. benchmark crude, West Texas Intermediate, gained $3.10 to settle at $70.30 a barrel.

 EU ETS unit prices are up overnight

Demand on the UK gas system remains at 130MCM as gas-fired power generation meets over 50% of power demand this morning.  Wind generation is almost negligible but solar power generation is currently supplying over 4GW to the GB grid.  Gas prices the UK NBP are on the rise again this morning with the front month now trading above 90.00p and contracts for the winter months up by as much as 2.00p.  Prompt contracts have yet to trade but the bid-offer spread on spot gas suggests a further rise today.  The crude oil market has moved higher again overnight with Brent up by 50 cents to $72.73 while EU ETS unit prices are also up overnight.