NBP curve gained after reports U.S. ordered diplomats to leave Ukraine

Rising tensions along the Russia-Ukraine boarder send gas prices higher

The rising tensions along the Russia-Ukraine boarder send gas prices higher on Monday while a short gas system supported the spot and day ahead products.  The remaining winter months on the NBP curve gained over 35.00p yesterday after early reports that the U.S. ordered diplomats to leave Ukraine.  On the prompt supply issues and increased demand boosted the within day and day ahead contracts which settled closed to 33.00p higher.  GB gas demand increased over the day to 357MCM, and supplies lagged behind for most of the day.  Weather forecasts for the reminder of the weak are for milder temperatures while wind generation is set to decline which may cancel out the lower heating demand.

The power curve opened firmer and continued to extend gains

The bullish gains seen on the NBP futures curve supported GB baseload power futures on Monday.  The power curve opened firmer and continued to extend gains over the session before easing back off the intra-day highs before the close.  The February contract settled £23.00/MWh higher yesterday while the front summer gained £20.00/MWh. Wind generation is forecast below the norm for the rest of the week and delivered a poor performance on Monday supplying around 1.5GW or just 3.5% of demand requirements.  Baseload for the day ahead increased by 24.0% or £46.07/MWh.

U.S. Federal Reserve will move to increase interest rates sooner than expected

The crude oil markets faced a sell-off on Monday as investors are concerned that the U.S. Federal Reserve will move to increase interest rates sooner than expected.  Early gains were reversed through the session and a slump in stocks on Wall Street added to the sell-off in crude oil yesterday while the dollar hit a two-week high on the back of rising tensions between Russia and the West as Russian troops maneuver along the Ukraine boarder.  At the close, Brent settled $1.62 a barrel lower while West Texas Intermediate shed $1.83 a barrel.

 Crude oil prices have rebounded this morning

Crude oil prices have rebounded this morning with geopolitical concerns driving prices as Brent recovers most of yesterday’s losses to last trade at $87.50 a barrel.  In the UK gas markets, the spot and day ahead contracts have opened flat but there has been very little activity in the last half an hour.  NBP futures opened softer but recent trades have seen losses being pared back and the front month is now just 3.74p lower at 221.00p.  The gas demand is forecast at 348MCM for today and supplies are trailing by 3MCM, wind generation is slightly higher than forecast according to the National Grid and hence gas demand is down on yesterday.

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