The GB gas markets settled higher for a second day this week
The GB gas markets settled higher for a second day this week as near curve contracts recovered most of the losses recorded on Friday. The April contract moved higher by 17.65p to settle at 263.42p. Likewise, the summer contract closed at 264.56p, up 16.68p. Europe and Russia are in a standoff over payments for gas contracts in Russian roubles, and there are renewed concerns Moscow could halt gas exports. Prompt prices were also marked higher on the day, but gains were more modest as the spot and day ahead products added 6.05p and 4.50p respectively. An unplanned outage curbed Norwegian imports to the UK yesterday while forecasts for a drop in temperatures could see GB gas demand increase for the end of the week.
The near curve was buoyed by gains in corresponding contracts on the NBP yesterday
GB baseload futures at the front of the curve averaged gains of around £6.30/MWh on Tuesday. The near curve was buoyed by gains in corresponding contracts on the NBP yesterday after renewed concerns for Russian gas supplies to Europe. Moscow has demanded payment for gas contracts in roubles, but European nations want to remain with dollars or euros. The outlook for wind generation has improved for the back half of the week but this failed to prevent a rise in the day ahead product yesterday. Wind generation was below 2.0GW on Tuesday but is forecast to rise above 6.0GW for Wednesday and higher again on Thursday.
The global benchmark fell a further $2.25 a barrel
The positive spin from the peace talks coupled with lockdowns in China weighed on crude oil prices on Tuesday. The global benchmark fell a further $2.25 a barrel after losing $8.17 a barrel in the previous session. Demand concerns have been raised as half of Shanghai remains under a lockdown with expectations that it’ll be extended to the west of the city this weekend as China struggles to contain the latest surge in Omicron cases. The peace talks being held in Istanbul appear to be progressing as Moscow promised to scale down military operations around Kyiv. The May contract for Brent settled at $110.23 a barrel while the U.S. benchmark, West Texas Intermediate, declined by $1.72 a barrel to $104.24 a barrel.
The NBP futures market has opened stronger this morning
The NBP futures market has opened stronger this morning with April moving above 300.00p per therm in early trades. This contract along with the quarter 2 and the summer contracts expire on ICE today and the April contract is the only product to post a trade. The market seems to be reacting to news that the German government is take steps in planning gas rationing should the payment dispute with Russia escalate. Prompt prices on the NBP have traded up to 30.00p higher despite the GB gas system forecast to run 16MCM long against todays demand of 271MCM.