NBP near curve is gaining momentum this morning

16 May 2022

Future gas prices eased on Friday

Gas futures on the NBP eased on Friday as most of the previous session’s gains were reversed over the day.  The summer months opened with losses of up to 20.00p per therm and these contracts continued to shed premium through the session with the June contract settling 27.10p down at 148.45p. Over the week the contract was 10.95p higher but the remaining summer months were down by almost 3.00p.  Russian gas flows to Europe did not decrease on the day despite the country imposing sanctions on former Gazprom units in Germany.  On the prompt there was a late run up in prices as Norwegian flows to the UK could be impacted by planned maintenance to increase for the week ahead.

A drop in carbon prices fed into the UK baseload market on Friday

A fall in gas and GB carbon prices drove the baseload power curve lower on Friday as the remaining summer months settled an average of £8.00/MWh down on the day.  The June contract shed £10.00/MWh to close at £167.50/MWh, but this is up £7.00/MWh over the week. There was an increase in the baseload for the day ahead product on Friday as wind generation forecasts for Monday were showing a decrease on the levels seen late in the week.  The contract gained 14.1% or £12.31/MWh to settle at £99.60/MWh.

Crude oil prices ended the week higher on Friday

Crude oil prices rose on Friday on renewed optimism that China’s Covid-19 spread was not worsening and U.S. gasoline prices hitting a record high.  U.S. reserves of gasoline stocks has fallen for the past six weeks and with the U.S. about to enter the driving season demand could spike and diminish reserves further.  Authorities in Shanghai have said restrictions on movement should be eased this month as the city expects to open again adding to concerns for tighter supplies.  At the close, Brent for July delivery settled at $111.55 a barrel, up $4.10 a barrel, while the June contract for WTI gained $4.36 to settle at $110.49 a barrel.

NBP near curve prices have edged high this morning

Gas prices in the UK have gapped up this morning by over 20.00p as the focus returns to the halting of gas supplies across Ukraine. The Russian gas operator Gazprom has announced that it is technologically impossible to shift all volumes to new routes. This has clearly spooked the market and the front month is up by 25.76p at 165.50p. Winter 2022 has also been impacted with prices up by 24.18p at 258.00p.  Forecast demand in the UK is coming in at 231MCM with over 90MCM of this being exported via the various interconnectors to continental Europe. The system is running short by 9MCM, and prompt spot price is up by 36.95p per therm.
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