NBP were pared back later in the session
The early gains to near curve contracts on the NBP were pared back later in the session as the remaining summer months settled an average of 4.00p higher on Tuesday. The July contract which took on front month status on ICE yesterday settled at 183.71p having traded close to 200.00p earlier. Initially the market responded to higher gas prices across Europe as flows from the Nord Stream 1 pipeline to Germany were reported to be around 10% down on the previous day. Prompt prices also reversed earlier gains yesterday. LNG deliveries to the UK remain robust while GB natural gas exports to the continent are forecast to decline in June. The UK government are considering using the Rough storage facility to bolster storage supplies for the future but discussions are ongoing.
Increases in carbon prices
The June contract for baseload power settled £1.00/MWh down yesterday after trading higher earlier in the session. Losses on the day were tempered by increases in carbon prices as EUAs settled around 80 cent per tonne higher. Baseload contracts past the summer months retained much of the earlier gains and settled an average of £3.00/MWh up. Baseload for the day ahead eased on Tuesday despite forecasts for wind generation to remain low on Wednesday. Wind is expected to fall below 1.0GW but forecasts improve for the week ahead. At the close the day ahead, product was £173.00/MWh, down £8.00/MWh.
The crude oil markets opened with strong gains
The crude oil markets opened with strong gains yesterday following the overnight agreement of the EU to ban up to 90% of Russian oil. The terms allowed for Hungary along with Czech Republic and Slovakia to continue to receive pipeline oil for an unspecified time. Demand in China, the world’s second largest oil consumer, is expected to rebound following the reopening of Shanghai after the restrictions for Covid-19 lockdowns shut down the city. Brent gained up to $3.00 a barrel early on but prices eased back near the end of trading. On the supply side, reports that OPEC+ have under produced by 2.6m barrels per day, almost half is attributable to Russia, undermines their commitment to increase production by 432,000 barrels per day for July.
Crude oil prices have continued to increase
The NBP futures market has opened with significant losses this morning as the front month, July, is down by over 16.00p to last trade at 167.00p. The winter contract has traded at 243.00p which is 8.00p below last night’s close. The prompt has still to record a trade, but the bid offer spreads are wide as the GB gas system is forecast to run short by 6MCM against todays demand of 262MCM. Crude oil prices have continued to increase and August, the new front month for Brent last traded at $117.55 a barrel, up $1.96 a barrel.