NBP futures for September and the winter period gained
Gas prices across Europe surged ahead on Monday on expectations for lower exports from Russia in September. European gas prices had already been inflated due to high demands of LNG in Asia, while a fire at the Russian condensate plant at Novy Urengoy has curbed Russian exports along the Yamal pipeline through Poland to Germany since early August by around 30MCM. NBP futures for September and the winter period gained between 7.50p and 8.60p on Monday after reports that Gazprom scaled down additional capacity bookings via Ukraine for September. The capacity booking is less than 5% of the usual booking of firm capacity for earlier in the year and raises the question of Gazprom’s ability to supply.
Surge in gas prices lifted baseload power futures
The surge in gas prices lifted baseload power futures yesterday while stronger carbon prices also added to the uplift on the power curve. The September and winter months all moved higher by just under £6.00/MWh on the day with contracts past the winter gaining an average of £2.00/MWh. Carbon EUAs added €2.50 per tonne with the Dec-21 contract closing at €57.95 per tonne. Renewable supplies were reduced in the stack over the weekend and wind generation was 5.0GW yesterday. It is expected to increase by around 50% today and so the baseload power product moved in opposing direction to the futures market and eased by £1.55/MWh.
Crude oil prices opened softer to start the week
Crude oil prices opened softer to start the week after the release of weak Chinese economic data for July. Manufacturing output along retail sales growth slowed last month coming in below forecasts as the surging new cases of Covid-19 restricts activity in the world’s second largest oil consumer. Prices did come back a little just before the session ended after OPEC+ confirmed there was no requirement to release further supplies into the market outside of its current plans. The group have an agreement to increase output by 400,000 barrel per day per month from August until it’s production cuts are phased out. At market close, Brent was $1.08 a barrel down at $69.51.
NBP futures market has opened softer
After Monday’s surge in gas prices the NBP futures market has opened softer this morning with near contracts yielding around 2.00p. There’s not much appetite for prompt products as no deals have been struck as yet but the bid and offer prices are suggesting prices will ease on opening. GB gas demand is 144MCM for today and supplies are forecast long by 15MCM. Gas storage reinjection has continued through August with reserves rising to almost 60% of capacity having started the month at around 30% full. Crude oil prices are around 30 cents a barrel down on last night’s close.