On the UK gas market contracts traded in both directions
European gas market continued to digest the news that a broad agreement had been reached between European leaders and the U.S. that the reliance in Russian gas would-be reduced. The EU and U.S. have agreed a deal for substantial supplies of LNG to be delivered to European markets. While the volumes agreed would not by themselves be enough to displace all Russian gas it was a step in the right direction. On the UK gas market contracts traded in both directions in the early part of the session but overall, the news was seen as positive, and contracts posted significant losses in the afternoon session. At market close gas contracts out to Winter 2022 were down by just under 26.00p per therm.
The EUA carbon market was generally stable
The baseload power curve followed the direction of the NBP futures market once again on Friday will all periods shedding premium. the front month April baseload contract fell by £15.00 while the May contract shed £24.55 to close at £207.50/MWh. The EUA carbon market was generally stable with minor price movements not impacting on the power market. Forecasts for wind generation remained below the seasonal norm with an average of 6.8GW expected. Despite the relative lack of wind generation, the minimum supply margin was comfortable and prompt power prices reduced as a result.
The Crude oil market traded in a wide range on Friday
The Crude oil market traded in a wide range on Friday with the spread between the high and the low coming in at over $5.00. The market was unsure of what direction to take with the low coming in at $115.16 while contract also traded to a high point of $120.55. The agreement reached at the summit between the EU and U.S, that Europe would move to reduce its dependence on Russian gas has caused some ripples in the crude oil market. An attack on an oil terminal in Saudi Arabia provided the support crude needed to push higher. In the final analysis the bulls won out and crude added $1.22 on Friday with a cumulative 5-day gain of $12.39.
UK gas markets opened weaker this morning
UK gas markets opened weaker this morning with contracts trading between 3.00p and 5.00p below last week’s close. The market has changed tack in the last hour or so with some premium being added. The front month April contract is priced at 242.95p up by 6.34p from the previous close. The Summer 2022 contract is less frequently traded and while it is still showing a loss of 5.00p this does not reflect current bid/offer spreads. Forecast gas demand today is at 250MCM and the system is currently well supplied with a surplus of 10MCM. Crude oil markets are in retreat this morning and Brent crude has already shed $4.15 as the April contract trades at $116.50 a barrel.