GB baseload power prices staged a mini revival on Friday

Following three sessions of huge losses the UK gas market paused for breath on Friday

Following three sessions of huge losses the UK gas market paused for breath on Friday as contracts moved between gain and losses over the day.  This was not a surprising development given the scale of the recent losses.  The Summer 2022 gas contract peaked at 510.00p per therm on Monday 7th March only to decline by over 220.00p in the course of three sessions.  Summer 2022 settled on Friday at 305.00p per therm just a modest 16.00p higher than the previous session.  The Winter 2022 contract has a similar journey with prices swinging between a low of 260.00p and high of 305.00p.  Increasing optimism about Europe’s ability to cope without Russian energy supplies appears to have given the market the impetus to move lower despite the ongoing appalling events in Ukraine.

Contracts moved between gains and losses in a volatile session

GB baseload power prices staged a mini revival on Friday following three sessions of significant losses.  The power market had initially opened weaker, but contracts moved between gains and losses in a volatile session.  In was not surprising that the market went higher but in the context of recent falls the gains were modest. The outlook for wind generation in the coming days has been reforecast lower but temperatures have also been revised higher which should reduce heating demand.  Day ahead baseload eased as a result although average gains on the curve were just under £7.00/MWh

Crude oil markets posted some gains during the session on Friday

Following two sessions of losses, one of which was of nearly $17.00, crude oil markets posted some gains during the session on Friday.  Over the course of the week however Brent crude was in negative territory with the five-day movement coming in $5.00 per barrel lower.  In the current fraught environment, there are a number of significant supply unknowns which is impacting market movements.  Principle among them is whether OPEC will increase production to counteract the loss of Russian supplies as many traders and countries steer clear of Russian crude.  Some OPEC members are keen on increasing supply but Russia’s membership of the OPEC+ group complicates the decision.  At market settlement the Brent crude contract was priced at $112.67, up by $3.34 a barrel.  

Gas and power markets across Europe have opened lower this morning

Gas and power markets across Europe have opened lower this morning as optimism grows about the prospect that latest session of talks between Ukraine and Russia may lead to a ceasefire.  Talks are scheduled to take place today, but as Russian attacks intensified over the weekend the outcome remains uncertain.  The UK gas market opened well below the previous close and losses have been extended to all contract that have traded thus far.  Summer 2022 is priced at 280.00p, down by 35.00p while Winter 2022 is priced at 265.00p, down 24.00p.   Crude oil markets are also in retreat with the front month Brent crude contract changing hands

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