GB gas demand was well below Tuesday’s levels due
Early losses to NBP natural gas futures were pared back a touch over the day on Wednesday but contracts out to next winter held on to losses of just over 6.00p. A further 12 vessels of LNG are expected to land at British terminals by the end of the month which would set a record of around 2m tonnes of LNG in January. This influx is having a bearish influence on prices and the prompt also posted significant falls on the day. The spot and day ahead prices fell by over 10.00p despite continued issues on Norwegian feeds which seen Langeled flows at 60MCM. GB gas demand was well below Tuesday’s levels due to increased wind generation which took around 30MCM out of demand.
Carbon EUAs declined yesterday
While wind generation was strong at over 12.5GW on Wednesday, it is expected to be around half of that today and this provided support to the day ahead product which settled higher at £191.97/MWh. Carbon EUAs declined yesterday reversing part of the previous session gains and the spot closed at €81.26/ tonne, down €1.19. GB baseload futures tracked the gas and carbon markets lower yesterday and declines averaged £5.81/MWh for contracts out to the winter. The influx of LNG is weighing on gas prices but there’s still a couple of winter months to get through, so the markets remain on edge.
Fire on the Kirkuk-Ceyhan pipeline, which carries crude oil from Iraq to Turkey
A fire on the Kirkuk-Ceyhan pipeline, which carries crude oil from Iraq to Turkey, increased supply concerns and boosted crude oil prices on Wednesday. The Turkish port of Ceyhan is a key source to transport oil to Mediterranean countries. The fire was caused by a nearby power pylon which exploded and was quickly extinguished restoring crude oil flows later in the day. Earlier this week tensions in the Middle East were raised after Houthi attacks on the UAE and prices had already set fresh seven-year highs. Brent peaked at 89.17 a barrel yesterday before slipping back to close at $88.44 a barrel, up 93 cents.
Crude oil prices have stepped back from the fresh seven-year high
Forecasts for lower wind generation for today has led to GB gas demand rising to 356MCM. The national grid is showing supplies marginally short with LNG nominations for the day of 104MCM, while Langeled flows are close to capacity at 69MCM. The front month on the NBP curve is down 8.04p in early trading while the summer contract has declined by 5.42p to 143.50p. Crude oil prices have stepped back from the fresh seven-year high, and Brent is 37 cents down at $88.07 a barrel. The E.I.A.’s weekly oil report will be released later today and is a day late due to Monday’s public holiday in the U.S. for Martin Luther King Jr.