Gas market opened firmed on Tuesday
The gas market opened firmed on Tuesday morning extending the gains from the previous session. these increases came about despite an improvement in gas fundamentals with the system operating with a surplus of 5MCM on a forecast demand of 128MCM. The unplanned outage on the Norwegian Troll gas field continues although there appears to be little impact on the UK supply/demand balance. Cooling temperatures have lessened the demand for power as air conditioning is switched off. Nonetheless the front month August contract added a further 2.76p during Tuesday’s bring the price to 95.01p per therm.
GB baseload power prices extended gains
Near term GB baseload power prices extended gains for the second session in row as August baseload added £1.47 to close at £94.07/MWh while September was up by a £1.00 at £94.05/MWh. Bullish NBP gas prices were the principal reason for the increase while lower EUA carbon prices provided a modicum of relief. Day ahead baseload shed £3.50 to move to £96.60/MWh as wind generation levels performed better that expected. Both EUA and UK ETS carbon contracts moved lower by 20 cents and 88 pence during Tuesday’s session.
Crude oil markets continued to trade rangebound
Crude oil markets continued to trade rangebound for the second session in a row as no new fundamental drivers emerged to give direction. Brent crude has already recovered the bulk of the premium lost during the sell off last week and it is apparent that crude is not inclined to push any further higher, at least for the time being. Brent crude did trade briefly above the $75 a barrel mark at $75.05 before falling to a low of $74.16. this narrow trading range of less than a dollar is typical of a market that is waiting on some new event that will provide direction. At market settlement crude finished at $74.53 a barrel in what was a cautious session.
Third session in a row the gas market opened firmer
Price increases remain the order of the day on the UK NBP gas market as for the third session in a row the gas market opened firmer. The front month August contract is up by 2.71p in early trading as this contract changes hands at 98.50p per therm. September gas has also posted a similar increase while further out the curve, upward price movement is between 1.30p to 2.00p. Day on day gas demand has reduced to 116MCM and the system is running with a surplus of 10MCM. It is clear that the unplanned outage at the Troll field is having minimal impact on UK supplies. The crude oil market is moving higher this morning with Brent crude up by 74 cents at $75.22 a barrel.