UK NBP gas prices have gapped higher this morning

A late rally on the market saw prices increase towards the close

Gas contracts at the front of the UK NBP curve remained in negative territory for much of the day before a late rally on the market saw prices increase towards the close. Strong demand from the UK power balancing sector lifted both the EUA carbon and NBP gas markets.  While the monthly contracts for Quarter 1 2022 added a modest amount of premium the Summer contract traded up by 7.71p in total.  Likewise Winter 2022 pushed further higher as risk premium increased.  Gas demand on the day was more less at the seasonal norm at 334MCM and the system was well supported by 86MCM of LNG send out with 12 MCM coming from storage withdrawals.

The GB baseload power prompt eased

The GB baseload power prompt eased as the conditions for wind generation improved and wind was expected to contribute over 10GW to the system.  The day ahead baseload contract fell by £26.00 as this contract settled at £204.00/MWh.  The UK system was still somewhat tight as a high level of exports flowed to France and the Netherlands. Baseload power futures firmed once again on higher gas and EUA carbon costs. EUA carbon allowances posted strong gains in excess of €2.90 per tonne as high demand from UK balancing market provided support.   On the power curve both January and February rose by £5.50 and £6.75 per tonne.

Crude oil prices extended gains for the third session

Crude oil prices extended gains for the third session in a row as the market remains uncertain as to the OPEC plus Groups intentions regarding short term production.  The OPEC meeting which took place last week failed to provide much direction and in fact the meeting will stay in session until the impact of the Omicron variant is clearer.   OPEC have kept open the option of revising the position on production quotas once further scientific data is available on the new strain of the virus.  This has caused quite an amount of confusion in the market with the Brent crude contract once again establishing a firm position above the $70 a barrel mark as it settled at $73.80 a barrel.

Crude oil prices continue to firm

UK NBP gas prices have gapped higher once again this morning with gains at the front of the curve coming in between 13.00p and 15.00p.  The Summer 2022 contract is also under considerable pressure as it trades at 133.20p, up by 5.25p from last night’s close.  The supply/demand balance has flipped around from yesterday and the UK system is operating with a deficit of 9MCM.  The Langeled pipeline is operating at full capacity and is delivering 75MCM to the UK system.  LNG send out from all sources is coming in at 69MCM as new tankers arrive in the UK on a regular basis.  Crude oil prices continue to firm with Brent up by $1.87 at $74.95 a barrel.