The market had opened with sharp gains
Near curve futures on the NBP settled an average of 13.50p higher on Monday as fears of supply disruptions grow as the conflict in Ukraine exacerbated. There was no evidence of lower flows yesterday as gas flows from Russia into Europe were on a par to Friday’s levels with some entry points showing higher nominations. The market had opened with sharp gains of over 50.00p per therm but this premium was gradually pared back over a volatile session. While contracts out to the winter recorded gains, futures from summer 23 settled lower by around 2.00p. Forecasts for cooler temperatures and lower wind generation could lead to an increase in gas demand later in the week and the prompt reflected this with gains averaging 25.50p.
Volatility in the gas markets drove baseload power movements yesterday
Volatility in the gas markets drove baseload power movements yesterday. Near curve contracts settled between £7.75/MWh and £15.15/MWh higher yesterday despite s sharp fall in carbon prices on the day. Baseload for the day ahead added £26.41/MWh on the back of lower wind generation forecasts and gains to the NBP prompt. Carbon EUAs fell by 5.8% or €5.15 per tonne yesterday. Reports emerged over the weekend that Germany is to consider delaying closures of its remaining nuclear plants in order to sustain it’s energy supply in case the conflict in Ukraine is protracted.
There was a bounce in crude oil prices on Monday
There was a bounce in crude oil prices on Monday as sanctions on Russia were ratcheted up. Russian financials and banks have been targeted which could cause disruption to Russian oil exports. The market is already tightly supplied, and a restriction of Russian oil exports would see the market tighten further. The sanctions have also moved companies like BP Plc to declare that they will exit Russian oil investments which could lead to oil production issues for Russia. Brent settled at $100.99 a barrel up $3.06 a barrel while West Texas Intermediate gained $4.13 to close at $95.72 a barrel.
Gas futures at the NBP have opened firmer this morning
With no breakthrough in the peace talks between Russia and the Ukraine, gas futures at the NBP have opened firmer this morning. The April contract is trading near the higher level of the morning as is up 23.21p on yesterday’s close. The Summer contract last traded at 254.00p, up 16.36p. Prompt prices have opened stronger too, with the day ahead 30.95p up at 260.00p. The GB gas system is showing a modest deficit against todays demand of 294MCM with LNG send out down on yesterday’s levels. In the crude oil markets, May has assumed lead month for Brent and this contract last traded at $101.38 a barrel, up $3.39 a barrel on last night’s close.