After four sessions of significant losses, near futures settled within a penny of Monday’s close

Demand is expected to pick up for the remainder of the week

The GB gas system operated with a modest surplus for most of the day yesterday as demand ran up to 207MCM but prompt prices at the NBP continued to rack up gains.  Demand is expected to pick up for the remainder of the week save for Thursday when wind generation is forecast to increase and the spot and day ahead products added 2.50p and 4.80p respectively to close at 204.05p and 208.25p.  After four sessions of significant losses, near futures settled within a penny of Monday’s close yesterday having oscillated between 5.00p higher and a penny lower for much of the session.

Baseload power prices in the UK rebounded

Baseload power prices in the UK rebounded on Tuesday with the near curve averaging gains of £1.50/MWh.  A rise in carbon and coal along with volatility in the gas markets provided support for futures on the day.  Carbon EUAs traded up to a euro higher during the session but gains were pared back later in the day to leave contracts around 15 cent/ tonne up on the day. The day ahead baseload contract shed £16.18/MWh on Tuesday despite forecasts for lower wind generation for the rest of the week.  Generation from wind should drop off by around 20% from yesterday’s levels to 3.9GW today and is forecast to pick up on Thursday before easing going into the weekend.

Trading in the crude oil markets was volatile yesterday

Trading in the crude oil markets was volatile yesterday after the markets opened firmer but then flip-flopped between gains and losses.  Prices have hit three-year highs recently buoyed by increased demand and record high gas prices, but yesterday the rally was cooled after the International Monetary Fund cut its global growth forecast for 2021 to 5.9%. Brent dipped to a low of $82.75 a barrel shortly after the IMF report was released but recovered later in the session to settle just 23 cents a barrel down day on day.  West Texas Intermediate gained 12 cents to close at $80.64 a barrel.

Gas futures have opened higher this morning with near months adding around 15.00p

Gas futures have opened higher this morning with near months adding around 15.00p in early exchanges.  The summer contract for 2022 last traded at 104.48p, up 1.63p.  The prompt has yet to get off the mark today, but it looks like those products will open higher.  Gas demand is pitched at 197MCM for today and supplies are comfortable once again with a modest surplus forecast on the National Grid’s site.  LNG send out is a touch lower today at 21MCM, but Norwegian imports are up. Brent last traded at $83.32 a barrel which is 10 cents a barrel down on last night’s close, but the markets will have one eye on the U.S. inventory report due later today.