Carbon EUAs yielded the early losses

06 August 2021

NBP futures opened softer on Thursday

NBP futures opened softer on Thursday with near curve contracts declining through to the afternoon before reports of a fire at a Russian gas plant spooked the market and near contracts moved over 4.00p higher intra-day.  The fire was at a gas line which feeds into northern Europe through Poland and Belarus and raised concerns for tighter supplies for the winter.  Its not yet known the extent of disruption the fire will have on supplies but imports from Norway increased yesterday as the unplanned outage at Troll has been resolved and the spot and day ahead were shielded from the late increases.  The September contract traded to a low of 104.32p before settling at 108.56p.

Baseload for the day ahead eased

The reversal of direction in NBP gas futures late on Thursday influenced the baseload power curve as futures out to next summer settled an average of £2.25/MWh higher.  Carbon EUAs also yielded the early losses and ended the session with gains of 80 cent per tonne across the board as the spot price closed at €56.14 per tonne. Fundamentals for the prompt has changed in recent days with lower temperatures lessening the demand for cooling while wind generation is set to pick up.  Baseload for the day ahead eased £3.77/MWh yesterday.  Wind generation contributed 26% of yesterdays GB power demand.

Crude oil prices settled higher

Crude oil prices settled higher yesterday as tensions in the Middle East were raised after the Israeli air force struck Lebanon targets in retaliation for earlier strikes.  From the start of the week, crude oil prices had tanked, with Brent losing almost $6.00 a barrel on concerns that the delta variant would slow demand recovery. The current variant of Covid-19 is a super-spreader and has resulted in the reintroduction of restrictions in some large cities in the U.S. and China earlier in the week, while it is believed that Japan is set to expand restrictions too. At the close, Brent for October delivery was up 91 cents a barrel to $71.29 a barrel while West Texas Intermediate settled at $69.09, up 94 cents a barrel.

 Gas futures on the NBP have opened strong

Gas futures on the NBP have opened strong this morning with gains of up to 3.00p on near curve contracts as the market continues from where it left off last night.  There have been no further updates to the fire at the Russian gas plant in Novy Urengoy but the market is clearly concerned as European gas supplies are already expected to be tight going in to the winter.  Trading on the prompt has not started as yet but the GB gas system is forecast long by over 20MCM with demand for today at 115MCM.  Crude oil prices have also firmed this morning with Brent last trading at $71.65 a barrel up 36 cents.