Another surge in carbon prices pushed gas prices at the NBP higher
Falling Norwegian supply to the UK and another surge in carbon prices pushed gas prices at the NBP higher on Thursday. Marginal movement in both directions on the UK gas market yesterday morning became more bullish by midday with prompt and near futures recording substantial gains by the close of business. Prompt prices were up by an average of 4.00p and the front month hit a new record high of 130.00p. The market concerns over winter supply remained the main price driver amid uncertainty around Russian supply and LNG availability and near futures contracts for the winter months settled 4.30p higher.
GB baseload futures surged higher again on Thursday
GB baseload futures surged higher again on Thursday tracking strong gains on the gas and carbon markets. EU ETS unit prices reached new highs on the day with the current year price settling at €61.35 per tonne. Weak gas supply and storage levels were compounded by news of only one delivery of LNG to the UK this month, a fraction of what was seen in recent years. The baseload power prompt stepped higher with day ahead up by £8.00 and week ahead by £22.00 on ongoing weak wind forecasts. Wind is expected to remain at under 5GW next week, well below the seasonal norm.
Following two days of declining prices, crude oil rebounded
Following two days of declining prices, crude oil rebounded on Thursday with Brent gaining $1.44 to settle at $73.03 a barrel. An announcement from OPEC+ that they intend to maintain agreed rates of increased production for the remainder of this year did little to dent the bullish sentiment on the market yesterday. OPEC’s decision is based on the fact that storage levels of crude in OECD countries is falling, indicating increasing demand despite the pandemic. The resumption of air travel has reinforced this view and Europe’s biggest carrier, Ryanair, is back up to 75% of passenger numbers compared to pre-pandemic 2019 levels.
Prompt prices look set to open flat or marginally higher this morning
GB gas supplies are forecast 10MCM long against a demand of 143MCM for today. Norwegian imports are down on levels seen for much of the week but supplies from the gas storage facility at Stublach are compensating for this. Prompt prices look set to open flat or marginally higher this morning while early gains on the near curve have been pared back with the October contract down from a high of 133.30p to last trade at 132.50p. After yesterday’s increase in crude oil prices, the markets have continued to edge higher this morning although gains are marginal with Brent just 12 cents a barrel up.