Prompt products on the NBP crashed on Thursday
Prompt products on the NBP crashed on Thursday in response to expected low demand for the next week or two. Temperatures for the remainder of April are expected to be close to the norm or better while forecasts are now higher than expected for wind generation. Meanwhile LNG imports from Qatar to the UK are expected to ramp up for the rest of Q2. The spot and day ahead shed 90.00p and 91.00p respectively on Thursday while near months also recorded significant losses after the National Grid said in its Summer 2022 outlook report that the UK has sufficient gas supplies to see out the summer. The May contract settled at 177.25p, down 35.84p on the day or 56.24p over the week.
Carbon EUAs moved in the opposing direction on Thursday
Baseload futures in the UK were marked lower on Thursday as the market tracked movements in the NBP curve. The front month, May, declined by £24.00/MWh to settle at £169.50/MWh. Carbon EUAs moved in the opposing direction on Thursday with contracts out to 2024 gaining €2.09 per tonne on average. Wind generation was revised higher than previous forecasts and was expected to average 7.6GW over the weekend. Baseload for the day ahead eased again with a further drop of 13.0% on Thursday as the contract settled at £164.00/MWh, the lowest since Russia invaded Ukraine.
Having opened lower on Thursday crude oil prices switched tack
Having opened lower on Thursday crude oil prices switched tack and reversed the early losses and then proceed to extend gains to the close as the market remained twitchy. The EU is considering a phasing out of Russian oil and the markets responded with Brent gaining $2.92 a barrel on Thursday, bringing the gain for the week to $11.12 a barrel. The U.S. benchmark, West Texas Intermediate, settled at $106.95 a barrel, up $2.70 a barrel. If the EU ban Russian oil, it is believed in the short term the Strategic Reserve release will meet demand but for the longer term more supplies will be needed, and OPEC have already ruled out an increase in output.
The front of the NBP curve has opened lower
The front of the NBP curve has opened lower after the bank holiday weekend with both May and June trading around 6.50p down on Thursday’s close. The front winter contract has also opened softer with the last trade going through at 230.00p. There have been no trades agreed on the prompt board, but the bid offer spreads are suggesting prices will be firmer on opening. The GB gas system is forecast to run 19MCM long today with demand at 285MCM. The crude oil markets have opened lower with the June contract for Brent last trading at $111.56 a barrel, down $1.60 from yesterday’s close.