Near gas futures settled an average of 11.40p higher
Near gas futures settled an average of 11.40p higher on Wednesday as the market reacted to gains in Asian LNG prices. With Shanghai coming out of lockdown demand for LNG is expected to increase and this has propped up LNG prices in Asia. Near prompt prices continued to contract yesterday with the spot and day ahead falling by over 26.00p as the GB gas system was well supplied although demand was some 30MCM down on the previous day. The week ahead contract reacted to the gains on the near curve and settled 20.00p up to close at 135.05p.
Carbon EUAs closed almost 1.0% higher
Increases on the NBP curve along with higher Carbon prices supported the baseload power curve yesterday. The front month added £4.50/MWh to close at £157.50/MWh while the front winter contract settled at £238.50/MWh up £5.50/MWh. Carbon EUAs closed almost 1.0% higher as the spot closed at €81.14 per tonne. Wind generation increased yesterday and is expected to rise above 10.5GW for today which pressured the power prompt. The day ahead baseload product settled 10.0% down at £109.68/MWh. Latest forecasts have wind generation staying strong into the weekend.
The EU are close to an agreement on sanctions on Russian oil imports
The latest weekly report from the Energy Information Administration showed U.S. crude stocks have dwindled and provided some upside to crude oil prices on Wednesday. The U.S. government body reported that crude oil reserves fell by 1.0m last week leaving U.S. reserves 14.0% below the five-year average for this time of year. Gasoline stocks fell by a half a million barrels over the week while refining activity was the highest level since before the pandemic began and boosted distillate stocks. The EU are close to an agreement on sanctions on Russian oil imports and the EU president hopes for signed-off before their next meeting. Brent settled at $114.03 a barrel, up 47 cents yesterday while WTI gained 56 cents to close at $110.33 a barrel.
Natural gas futures on the NBP have opened softer this morning
Natural gas futures on the NBP have opened softer this morning with much of yesterday’s gains being reversed in early trading. The front month, June, last traded at 140.00p which is 8.88p down from last night’s close. Contracts for the rest of the summer months have declined by similar amounts while the winter contract is 4.10p lower. There have been no trades on the prompt thus far with no bid/ offer prices on the board either. The GB gas demand for the day is close to yesterday’s level at just over 200MCM and the system is well balanced. Brent has traded between $113.85 and $114.95 a barrel this morning and last traded at $114.61 a barrel.