Oil fluctuates over Ukraine tensions

Forecast gas demand on Friday was consistent with the previous day

Forecast gas demand on Friday was consistent with the previous day as it came in at 305MCM.  The system was finely balanced at the outset and stayed that way for the duration of the market.  As has been the situation of late LNG send out played an important part in keeping the system in balance and topped 95MCM at one stage.  On the market prices opened softer and traded just below the previous settlement for much of the day.  A late surge in the market saw additional premium added.  Developments on the Ukraine/Belarus border where live fire exercises are being conducted clearly spooked the market late on as just over 7.00p to contracts out to Winter 2022 was added on settlement.

 Gains for UKA carbon and NBP gas fed directly into GB baseload power

Gains for UKA carbon and NBP gas fed directly into GB baseload power contracts.  The GB curve was lifted at the beginning of the session and held onto these gains to the close.  The front month and April contract added £4.00 and £2.50 respectively while contract along the rest of the curve closed up by over £3.00 on average.  Wind generation continued to perform well above the seasonal norm and averaged 13.5GW on Friday. The wide system margin weighed on the power prompt and day ahead baseload for today fell to £160.50/MWh, Weekend power came in lower still at £149.62/MWh.

The situation in Ukraine provided the upside for the market

Crude oil markets continue to be influenced by the competing factors of the possibility of additional supplies coming on the market and risks to output as a result of the tension between the West and Russia over Ukraine.  Talks between the US and Iran are nearing completion and if a successful outcome is reached there is a distinct possibility if 2.5 million barrels of crude coming on the open market.  The situation in Ukraine provided the upside for the market as tensions continued to ratchet up.  This issue prevailed on Friday with Brent adding over $3.00 in late trading to close at $94.44 per barrel.  Over the full week crude posted a gain of $1.17.

NBP gas markets have opened with a bounce this morning

The NBP gas markets have opened with a bounce this morning which is not surprising given development over the weekend regarding Ukraine.  Tensions continue to ratchet up and the US has warned of an impending invasion by Russian forces.  The UK NBP market opened with a 17.00p gain for both March and April but this has been pared back with recent trades going through at 196.75p and 196.05p, up by 10.89p and 10.57p respectively.  Following Friday’s big gain, crude oil markets are relatively stable this morning with prices trading flat to the previous settlement.  The EUA carbon market has given up recent gains and prices are down by €2.50 per tonne this morning.

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