European energy prices continued to ease on Thursday

 Russian gas supplies into eastern European have been steady this week

European energy prices continued to ease on Thursday and GB natural gas prices recorded it’s third day of declines in succession.  Near curve contracts settled between 47.20p and 76.69p lower yesterday but over the last three days, those contracts are down 224.50p on average.  On the prompt, the day ahead closed 120.00p down while the balance of month contract shed 110.00p yesterday. Russian gas supplies into eastern European have been steady this week and the outlook for milder temperatures should curb GB gas demand for the next week or two.  Meanwhile British ports are expecting a further eight LNG shipments over the next ten days which should bolster supplies further.

Baseload contracts racked up a third day of losses

The declines in gas futures prices weighed on the GB power curve on Thursday with baseload contracts also racking up a third day of losses.  The April contract closed at £254.85/MWh, down £49.65/MWh yesterday which was the largest loss for the baseload curve. Carbon EUAs settled higher for a third session, with the spot closing at €74.12 a tonne. Wind generation is forecast to rise above 13.0GW on Friday and supply margins are expected to widen which pressured the baseload prompt.  Baseload for the day ahead settled £87.10/MWh down at £242.06/MWh.

Volatility in the crude oil markets continued Thursday

The volatility in the crude oil markets continued Thursday with Brent adding around $6.00 a barrel in early trading but then flip-flopped between losses and gains for the rest of the session.  In Turkey, the peace talks between Russian and Ukrainian representatives failed to reach an agreement on a cease-fire in the conflict yesterday. Confusion from the UAE over increasing output on Wednesday added to the 13.2% fall in Brent that day while the U.S. is looking to get more oil into the market by considering easing sanctions on Venezuelan oil and conduct a nuclear deal with Iran.  The International Energy Agency is also to consider a strategic oil release to encourage lower crude oil prices.  At the close Brent settled $1.81 a barrel lower at $109.33 a barrel.

Near curve contracts have reversed direction and are showing gains

The Russian overnight shelling on Ukraine was extended to attack three new cities last night.  The gas markets opened lower but in the last half an hour near curve contracts have reversed direction and are showing gains.  April, the front month, has gone from a low of 268.70p to last trade at 330.00p.  The summer contract hasn’t traded in a while and is still showing a decline of 19.84p from Thursdays close, but the bid and offer prices for the summer are suggesting a price in the region of 305.00p per therm.  Crude oil prices have bounced by around $2.30 a barrel this morning.

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