Brent crude recorded its biggest day-on-day loss in 3 months

 Concerns over Gazprom’s ability to replenish storage facilities

Russian supply to Germany via the Yamal pipeline remained at zero for a second consecutive day.  This raised concerns over Gazprom’s ability to replenish storage facilities in Germany from next week as predicted and following 2 days of relative calm on European gas markets, prices moved significantly higher on Wednesday.  Contracts for the remaining winter months gained 23.00p and the Calendar Year 2022 contract gained almost 10.00pp to 128.93p.  The spot price fluctuated widely and settled 8.00p higher day-on-day but the day ahead NBP contract was up by 20.00p to 188.00p.

Baseload power futures stepped higher

Baseload power futures stepped higher in line with gas and carbon prices on Wednesday.  Russian supply to Germany via the Yamal pipeline was logged at zero for a second consecutive day, causing Western European gas prices to surge higher on the day.  Rising GB power demand was partly offset by increased wind availability on the day. Baseload power futures stepped higher in line with gas and carbon prices on Wednesday.  The gas market gains were primarily driven by renewed uncertainty over security of Russian gas supply over the winter months.

The global benchmark fell by $2.73

The tight trading range which has prevailed on the oil market for the past week was ruptured on Wednesday as Brent crude recorded its biggest day-on-day loss in 3 months.  The global benchmark fell by $2.73 to settle at $81.99 a barrel.  The weekly inventory data from the U.S. Energy Information Administration helped pull prices back as U.S. crude and distillate stocks were shown to have increased more than expected last week.  This led to a $3.05 decline in the U.S. benchmark, West Texas Intermediate which settled at $80.86 a barrel.  OPEC+ meet today and are expected to continue with their modest increase in production quotas month-on-month, despite criticism from Joe Biden.

 The UK gas market is calm with only marginal movement recorded

Demand on the UK gas system is coming in as forecast for today at almost 270MCM.  Over 200MCM of this is heating demand but gas-fired power generation is drawing over 60MCM despite continuing strong wind generation levels contributing just under 10GW this morning.  After yesterday’s surge higher, the UK gas market is calm with only marginal movement recorded in early trading today.  The front month is up by 0.61p and Summer 22 has gained 0.99p.  The oil market has recovered some of yesterday’s heavy losses with the front month Brent contract up by a dollar to currently trade at $83.00 a barrel.