Brent settled higher on Friday snapping a run of three declines

Russian coal is to be banned and this offered support to energy prices

With the latest round of sanctions getting approval from the EU this week, Russian coal is to be banned and this offered support to energy prices across Europe on Friday.  NBP futures at the front of the curve traded higher in the early hours but the gains were reversed in the afternoon and the front month settled 4.95p lower, day on day.  Contracts past the front winter held onto some of the early gains closing around 7.00p higher as trading was thin on the far curve.  Forecasts for higher temperatures in the weeks to come pressured the NBP prompt as contracts settled an average of 31.80p down on Friday.

 GB baseload curve settled higher on Friday

Apart from the May and June contracts the GB baseload curve settled higher on Friday as the market reacted to news that the EU will ban Russian coal imports in the latest round of sanctions.  The May contract settled £4.75/MWh lower on the day as forecasts for above average temperatures weighed on the prompt and countered the gains due to the coal ban. Baseload for the day ahead settled 6.2% down on Friday as the contract lost £12.68/MWh to close at £193.13/MWh.  The losses came despite forecasts for lower wind generation for the start of the week.  Wind generation in the UK had been above average last week but is to return to normal levels.

Crude oil prices settled lower week-on-week for the second week in a row

Brent settled higher on Friday snapping a run of three declines although crude oil prices settled lower week-on-week for the second week in a row.  The market has been in decline due to the move by the International Energy Agency to release 60 million barrels of oil over the next six months, matching the promise from the U.S.  The Congress in Washington voted to ban Russian oil last week and the EU are still considering the option.  The release of strategic oil reserves will help compensate for a loss in Russian oil in the short term, but global reserves of crude oil are already low.  In China, the extension of the lockdown in Shanghai added to demand concerns.

NBP futures have opened softer this morning

NBP futures have opened softer this morning with the front month just over 6.00p lower on the last trade.  Trading has been concentrated on the front two months with no other products showing deals.  Prompt products are also slow out of the blocks this morning, but market fundamentals look positive as the GB gas system is showing a surplus of 14MCM against today’s forecast demand of 255MCM.  LNG send out remains robust at 95MCM for today while imports from Norway are nominated at 75MCM.  Crude oil prices have reversed Friday’s gains with Brent down $2.53 a barrel.  

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