Spot prices slumped during the opening hours
The UK gas curve market continued its upward movement on Wednesday morning; however, the uptick was small compared to the previous session. The remaining summer months gained 1.12p per therm on average while Winter-22 settled at 247.49p, up 1.19p per therm. Strong LNG supplies led to near curve contracts scaling back gains made on Tuesday, resulting in the front month closing 3.25p down to settle at 181.98 pence per therm. Spot prices slumped during the opening hours before gaining value in the afternoon. Gas demand in the UK was at 237MCM yesterday, finding support in strong exports to the continent because of the large discount seen in the prompt compared to other European gas hubs, particularly the Dutch market. The day ahead contract settled at 96.60p a 138.06p per therm discount to the TTF equivalent contract.
GB baseload power futures pushed lower during yesterday’s session
GB baseload power futures pushed lower during yesterday’s session as prices softened on the back of a sharp decline in the EUA market. The EU proposed new plans would add supply to the market in an effort to raise investment funds to replace Russian gas. The front month June contract declined £5.25 to settle at £178.50/MWh, while Winter-22 settled at £241.00/MWh. Baseload for the day ahead out turned lower at £99.62, down £20.10/MWh from the previous session. The contract was pressured by above average renewable generation.
Brent crude prices opened higher on Wednesday
Brent crude prices opened higher on Wednesday, as the market was supported by optimism surrounding China’s easing of Covid restrictions. The upward momentum was short lived, with weakness in the US equities market offsetting a tight supply picture as US crude stocks dropped by a 3 million barrels week on week. Wednesday’s downward sentiment was supported by the US Federal Reserve’s announcement that their economy may be damaged by attempts to reduce inflation. July the front month contract lost $2.82 a barrel to settle at $109.11 while the WTI contract closed above Brent for a second consecutive session at $109.59 a barrel.
The UK gas market has opened softer this morning
The UK gas market has opened softer this morning, with the front month beginning the session at 178p per therm, down 3.98 pence from yesterday’s settlement while seasonal contracts are yet to trade. UK gas demand is at 236MCM, slightly above seasonal norm which is supporting the spot market. Day ahead is up 11.40p from yesterday at 108 pence per therm. EUA futures have continued from yesterday’s decline, Dec-22 is trading at €82.80/tonne down €1.27 from opening. Oil prices have also opened weaker, Brent crude is currently trading at $107.87 a barrel.