Likelihood of an EU ban on Russian oil imports supports crude prices

All prompt products posted significant losses with weekend

Following the selloff of the previous session gas markets open weaker in early trading on Friday morning. The June contract assumed front month status and was marked down by 6.00p on opening.  It was clear that the lower prices and long bank holiday weekend encouraged some bargain hunters into the market and as trading activity increased so too did prices.  The June contract traded to high of 179.00p which was just shy of 20.00p above the previous session’s close.  Other Summer delivering contracts were up by 15.00p but the market failed to hang on to these gains and returned to negative territory towards the close. May 2022 settled for the final time on Spectron at 115.05p, down 13.61p on the day and 56.34p in the last five sessions.

Power futures for periods beyond the Summer went lower by £3.85 on lower gas costs

GB baseload futures at the front of the curve gained slightly while longer dated contracts moved in the opposite direction and displayed some losses.  With EDF’s Tornness nuclear due to go on maintenance a narrowing minimum supply margin pressured near term contracts. Gains were relatively minor with £1.60 added. Power futures for periods beyond the Summer went lower by £3.85 on lower gas costs. Baseload for the long bank holiday weekend eased by £30.00 while day ahead for Tuesday was marked up to £167.72/MWh on the tighter system.

Crude oil markets continued to push higher

Crude oil markets continued to push higher during the session last Friday with gains being extended for fourth session in a row.  The prospect of a complete ban on Russian oil by the EU appears to be on the horizon as the members of the block approach an agreement.  Since the Russian invasion happened in February many European countries have moved to reduce their dependence on Russian oil but this effort posed a huge problem Germany as the largest economic member of the Group. With Germany now not opposed to the ban crude oil markets have been pricing in more risk.  Brent crude settled higher by €1.75 at $109.34 per barrel.

June contract has given up all the gains from last Friday

The front month crude oil contract has switched from June to July and prices are down by a dollar this morning despite it becoming increasingly likely that the EU will impose a full ban on imports of Russian oil. Brent crude for June delivery is priced at €106.52 a barrel down by 97 cents. On the gas market the June contract has given up all the gains from last Friday and is now trading at 154.00p per therm, down by 9.68p from the previous close. July is the only other contract that has traded so far, and it too is going lower with losses coming in at 10.12p.  The UK continues to supply significant gas volumes to continental Europe as export nominations top 88MCM.  

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