Gas market was well set to extend losses for a third session in a row before a volatile half hour
The UK gas market was well set to extend losses for a third session in a row before a volatile half hour at the end of the session saw contracts out to winter 2022 add premium. Gas contracts for these periods were in negative territory by between 6.00p and 10.00p for much of the session before reports emerged that Russia had halted deliveries of natural gas to Poland. There was no official confirmation of this interruption through the Yamal pipeline, but the market took off in any event. Over the course of twenty minutes the front month May contract spiked to 181.558p, up by 35.05p from the low point. At market settlement gas prices were up by 15.00p out to Winter 2022 while longer dated seasonal contracts were marked down by between 6.00p and 9.00p
Gains in power were somewhat capped by a weakening EUA carbon market
The GB baseload power curve was neatly split with prices rises on contracts out to Winter 2022 while longer dated contracts posted some losses. Alate surge in UK NBP gas prices fed directly into power contracts as the market reacted to the potential loss of Russian gas supplies. Gains in power were somewhat capped by a weakening EUA carbon market. On the day EUAs shed €1.79 as the spot fell to €81.60/tonne. Baseload futures for Winter 2022 delivery were most impacted and gained by £12.50/MWh. Longer dated contracts extended losses for the third session in a row as prices fell by £9.70 on average.
Global crude oil prices recovered some of the premium
Global crude oil prices recovered some of the premium that was shed in recent days as the market firmed on the back of recovering equities and the view that Chinese lock down restriction might be short lived. The Brent crude contract for June delivery did go lower for a brief period as it traded to a low of $101.53. Prices recovered later in the session and while Brent did finish off its daily high it still posted an increase of $2.67 as the contract closed at $104.99 a barrel. News of a explosions in the breakaway Russian backed region of Trannistria in Moldova also spooked the market and once again illustrated that the ongoing war in Ukraine remains a key upside risk for crude oil markets.
The UK NBP gas curve is in retreat once again this morning
The UK NBP gas curve is in retreat once again this morning as some of the premium added in the late part of yesterday’s session starts to retrace. The market appears to be unconcerned regarding the announcement from Gazprom that they would be stopping gas supplies to Poland and Bulgaria. The front month May contract is down by 5.56p at 158.00p/therm while Winter 2022 has yet to trade bid/offer spreads for this period would suggest similar losses on this contract. EUA carbon markets have extended losses for the second day in a row with spot prices down by €2.79. Crude oil markets are trending higher with Brent up by 68 cents at €105.67 a barrel.