Gas markets across Europe settled lower
Gas markets across Europe settled lower for the second session in a row as the announcement from Vladimir Putin that Gazprom will send additional gas to Western Europe provided some relief. The additional flows are scheduled to come through the Yamal pipeline into Poland and will add an overall 17MCM to 20MCM of supplies. This is an extremely modest amount and should be viewed in the context where UK gas demand for the Winter averages between 300MCM and 350MCM. In a total European context, the new supply is mere drop in the ocean, but the market was happy to seize on any positive news as sentiment continues to drive prices.
Baseload power contract climbed to a session high
The November baseload power contract climbed to a session high of £270.00/MWh before a selloff in the gas market caused all power contracts out to Q1 2022 lose significant premium. The downside in the gas market was triggered by a perception of increased supplies from Russia over the coming Winter. The forecast for a pick-up in wind generation levels came about and with system comfort increasing the day ahead baseload power contract eased. this contract fell by £48.00/MWh to close at £221.75/MWh. EUA carbon contract recovered some ground on the day with 40 cents of premium added.
Market close the Brent crude contract was priced at $81.95
Crude oil prices firmed during yesterday’s session and regained some of the premium lost during trading on Wednesday. A pause in the value of the dollar against a number of other currencies gave the market some impetus to push prices higher. The dollar finished on par with the previous day as it settled at €1.15 to the US$. This position was still close to a 14-month high against the Euro and the focus turned to Eurozone inflation on account of surging energy prices among other commodities. Crude oil did open slightly lower at $79.08 per barrel nut turned north quite quickly in the later part of the session. At market close the Brent crude contract was priced at $81.95 a barrel, up by 87 cents.
Turbulence on gas markets continues
Turbulence on gas markets continues this morning following two sessions of heavy losses. Gas contracts at the front of the curve gapped up on opening but the market has seen the big gains fall out in the last hour or so. The front month November gas contract opened at 267.00p/them, up by 21.49p from last night’s close but has last traded at 246.88p, just 1.37p above last night’s settlement. The December contract was up at 279.15p earlier but is now trading in negative territory at 253.05p. Gas operations in the UK this morning is quite positive with the system operating with a surplus of 20MCM on a forecast demand of 192MCM. Brent is priced at $82.89, up by 94 cents.