Significant fall in gas futures on the NBP curve on Thursday
There was a significant fall in gas futures on the NBP curve on Thursday as summer months declined by an average of 33.00p. While the threat of Russia cutting more gas supplies remains, LNG shipments to Europe have increased this year and could possibly rise further as a slowdown in China could see LNG cargoes bound for Asia being diverted to Europe. GB ports are expecting up to eleven LNG deliveries in the first week in May, an increase of 45% on the same period last year. The May contract expired on ICE yesterday and settled at 128.66p, the lowest settlement for the contract since early December. Prompt prices received early support from reports of outages but the spot and day ahead products ended the session 3.00p lower.
Baseload for the day ahead reversed the previous day’s gains
GB baseload futures declines in tandem with the futures on the NBP gas curve yesterday as the market reacts to the influx of LNG supplies to Europe and the UK. The May contract settled £11.50/MWh lower at £153.50/MWh while the winter contract closed down by almost the same to settle at £230.50/MWh. Baseload for the day ahead reversed the previous day’s gains despite forecasts for wind generation to remain at low levels. The contract settled at £164.00/MWh as the UK prepares for a bank holiday weekend and demand is expected to ramp down.
Crude oil markets racked up a third day of gains yesterday
The crude oil markets racked up a third day of gains yesterday as the way seems clear for the EU to proceed with an embargo on Russian oil now that Germany is no longer opposed to a full ban. Germany has taken steps to be less reliant on gas and oil from Russia and is continuing to look for alternatives. Before the war around a third of Germany’s oil needs were met by Russia and this was cut to a quarter a month into the war. A strong dollar tempered gains on the day as the greenback reached its highest level in twenty years while the lockdowns in China and a slowdown in global growth are fueling demand concerns. At the close Brent settled at $107.59 a barrel, up $2.27 a barrel.
Brent has continued to firm overnight
Brent has continued to firm overnight in Asian market and early markets across Europe with latest trades for the June contract going through at $109.65 a barrel, an increase of $2.06 a barrel on last night. The possibility of an EU embargo on Russian oil imports continues to drive prices higher this morning. In the gas markets, June has extended earlier losses and is now 6.35p down on last night’s close. Contracts further out are flat or have yet to trade. Trading on the prompt has also been sluggish with no deals showing on the board as yet.