UK supply boosted by record LNG deliveries this year

The supply side has been boosted by record LNG deliveries this year

Forecasts for high wind generation saw prompt prices ease on Thursday as gas demand for power generation requirements is expected to ease.  A cold spell could see temperatures drop below the norm however and may add to domestic demand in the short term.  The spot and day ahead settled around 3.00p lower while the balance of month contract closed just over a penny down.  NBP futures settled mixed with early trading seeing contracts give back opening gains but as the day wore on the there was little change in price drivers. The supply side has been boosted by record LNG deliveries this year and UK ports could welcome as many as six tankers over the weekend.  At the close, the March contract settled 1.38p lower at 178.16p.

 Carbon market was more subdued yesterday

The baseload power market tracked movements in the NBP futures market on Thursday as the near curve settled marginally down or flat. The front month settled at £169.50/MWh, declining by £0.75/MWh while the summer contract closed flat at £169.50/MWh.  Forecasts for increased wind generation was countered by expectations for cooler temperatures and baseload for the day ahead settled higher at £174.47/MWh. After Wednesday’s sharp declines in carbon EUAs, the market was more subdued yesterday as EU lawmakers are to consider a proposal for more ambitious price control mechanisms.

 Crude oil prices were directionless yesterday

After halting the decline on Wednesday, crude oil prices were directionless yesterday as the market weighed up the latest EIA report against news of positive talks between the U.S. and Iran.  Talks between the two resumed this week with no agreement reached yet.  A deal could see the U.S. lift sanctions on Iranian oil and ease global supplies.  In OPEC’s monthly report the global demand for 2022 is expected to rise sharper than previous forecasts as the market recovers rapidly from the pandemic.  Brent settled 14 cents a barrel down on Thursday closing at $91.41 a barrel.

The NBP gas markets have opened softer this morning

The NBP gas markets have opened softer this morning with both the prompt and futures boards showing declines.  On the prompt, the weekend and day ahead products last traded 3.55p down with the last trade for Monday going through at 174.00p.  The March contract is 1.66p down at 176.50p while the summer contract last traded at 176.69p, down 1.79p.  The GB gas system is balanced this morning with the supply side showing a slight surplus against today’s demand of 306MCM.  Brent has fluctuated in price this morning and is currently 45 cents a barrel higher at $91.86 a barrel.

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