A tumultuous late part of the session saw prices add significant premium
UK gas prices traded somewhat lower for much of the session before a tumultuous late part of the session saw prices add significant premium as the market approached settlement. There was no discernable pattern to the moves as the front of the curve took off and added over 30.00p at one stage. The front month January contract traded to a low of 318.74p at one point before peaking late on at 366.00p, a swing of 47.23p over the course of the day. It was the same story for the other component parts of Q1 2022 with February peaking at 364.00p and March at 318.00p. As a result of the late flurry of activity the settlement price was more than 10.00p above the last traded price for near term contracts. The Summer 2022 contract were also impacted as 17.29p was added.
GB wholesale power contracts put on massive gains
GB wholesale power contracts put on massive gains as the market reacted to outages at two French nuclear facilities. The two 1.5GW Civaux power plants were shut down as a result of faults discovered during routine inspections. The loss of this French capacity impacted directly on exports to the UK via the interconnector and near prices surged as a result. The front month January 2022 baseload contract closed at a record high of £475.00/MWh as it added £117.50. Other near-term contracts were up by significant sums as the price pressure reverberated across the curve.
Market moved between modest gains and losses
Following the modest gain on Wednesday the crude oil market added a further $1.14 during yesterday’s session. The spread between the high and the low came in at $1.27 as the market moved between modest gains and losses over the course of the day. It would appear that the market remains conflicted between of the decline in U.S. inventories reported on Wednesday and the prospect of further travel restrictions dampening future demand. Concerns regarding the ongoing threat of the Omicron strain has seen some major countries announce further restrictions on travel. At market close Brent crude settled at $75.02 a barrel, up by $1.14 from the previous close.
Prices have been swinging wildly in the first few hours
The turmoil that arrived late on in yesterday’s market has spilled over to this morning although for the most part premium is coming out of contracts. The front month and other near term contracts opened 44.00p lower and fell further still in the opening part of the session. Prices have been swinging wildly in the first few hours and January is now trading at 344.00p, just 15.49p lower than last night’s close. Other near-term contracts are down by similar amounts as the market seeks to find some stability. Both the carbon and crude oil markets are in decline with EUAs down by €4.00 while Brent is trading at $73.55, down by $1.47 from last night’s close.