Gas markets across Europe experienced huge volatility on Monday
Gas markets across Europe experienced huge volatility on Monday as the prospect of sanctions on Russia being extended into the energy segment caused consternation on the market. The front month April contract was a bell weather for the rest of the curve as it opened at 610.00p/therm before going higher still as it peaked at 800.00p/therm. The market was wracked by considerable volatility thereafter as contract experienced wild swings. The low point for April came at 497.00p/therm with the market eventually settling at 539.53p/therm, up by 79.26p from the previous close. In a single hour the gas price for April moved by over 150.00p/therm with all other contracts mirroring the front month.
GB baseload power prices surged higher once again yesterday
GB baseload power prices surged higher once again yesterday as the prospect of more sanctions being imposed on Russian energy supplies increased. While the US administration appears to be keen on this idea the leaders of most major European economies are currently resisting this move. Nonetheless risk premium surged into all contract with price increases assessed at £35.00 for all contracts out to Summer 2022. Carbon EUAs came under severe pressure during the day as the sell off on this commodity continued. All periods out to 2023 were down by over €7.00 per tonne on average.
The Brent crude contract for May delivery rallied to $139.00 a barrel
The Brent crude contract for May delivery rallied to $139.00 a barrel in early trading on Monday, its highest price since the all-time high in 2008 when Brent reached $147.50 a barrel. The prospect sanctions on Russia being extended to the 10% of crude that it supplies to the global market has caused turmoil in the energy complex. Already we have seen in some instances where Russia cargos including oil and gas are not handled by dockers in various countries. Dramatic increases in oil tanker freight rates and insurance costs are also causing disruption in the physical market. In a market were all the news was negative, the moves by the U.S. to bring additional Iranian and Venezuelan oil back to the market barely featured.
All energy markets are displaying considerable volatility
Sentiment on all European energy markets continues to be dominated by the prospect of either Western nations stopping deliveries of Russian energy supplies or indeed Russian taking unilateral action to stop flow of gas and oil. All energy markets are displaying considerable volatility with opening bids coming in higher than last night’s close. Few contracts have changed hands at this stage with bid/offer spreads making trading exceptionally difficult. The front two months on the gas curve have swung between gains and losses and both April and May are down by 25.00p at time of writing. Brent crude is priced at $125.67 a barrel.