Crude oil prices hit a seven-year high on Tuesday

Norwegian imports continued to be dogged by the issues

The GB gas system operated with a deficit for most of Tuesday as demand of 342MCM was eventually met by increased storage gas send out along with robust LNG supplies of 125MCM on the day.  Norwegian imports continued to be dogged by the issues as Langeled flows ran at around half capacity, and according to the Gassco site this should be resolved by Thursday or Friday.  The spot and day ahead products on the prompt reacted to the short system and continued forecast for cooler temperatures and ended the session 7.55p higher.  On the curve, NBP futures were flip-flopping between gains and losses before settling higher.  February, the front month gained 3.17p to close at 187.52p while the summer contract settled at 155.20p up 1.20p.

 Carbon EUAs increased by 3.5% on Tuesday

Gains in the carbon and gas and crude oil markets buoyed the baseload power futures market yesterday.  The front month contract settled £4.00/MWh higher, and this was the largest gain of the day.  The summer 2022 contract added £2.15/MWh to close at £150.65/MWh.  Carbon EUAs increased by 3.5% on Tuesday with the spot settling at €82.45 per tonne. With wind generation forecast at nearly double Tuesday’s levels, the day ahead baseload product yielded over £22.00/MWh on the day to close at £177.20/MWh.  The National Grid has wind getting above 12.5GW for Wednesday which would be second in the power stack behind natural gas fired generation.

 Tensions in the Middle East adding to the tighter supply concerns

Crude oil prices hit a seven-year high on Tuesday as tensions in the Middle East increased adding to the tighter supply concerns.  The United Arab Emirates have come under attack from Houthi rebels which have threatened to target oil facilities.  The UAE have reserved its right to respond, however, there was a response from Saudi Arabia, escalating concerns for supply disruptions in the area.  Meanwhile the standoff between Russia and the Ukraine continues although recent reports of Russian troops moving to Belarus for ‘military exercises’ has also raised alarms that these could be deployed to attack nearby Ukraine.  Brent settled at $87.51 a barrel, the highest close for the global benchmark since 13-Oct-2014, while WTI also hit a multi-year high at $85.43 a barrel.

Flows through the Langeled pipeline are still not at full capacity

The crude oil markets have opened firmer this morning and both Brent and WTI are trading close to the morning highs with Brent last exchanging at $88.30 a barrel as the markets eye the Middle East for any further escalation in the conflict.  GB gas demand is forecast lower at 311MCM for today and supplies are 7MCM long.  Flows through the Langeled pipeline are still not at full capacity and are nominated at 60MCM for today.  NBP futures have opened softer but latest trades for the front month have seen that contract reverse off an earlier low to last trade at 179.00p. The front summer contract also looks set to trade above the low of 140.03p for the morning.

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