UK gas market reversed track during yesterday’s session
Following three sessions in a row of gains the UK gas market reversed track during yesterday’s session. The market opened weaker with prices below the previous settlement. As trading activity increased a major sell-off began with significant pressure on the front of the curve. The front month July contract fell to a low point of 151.00p/therm at one point and eventually settled at 159.84p, down by 23.87p from the previous close. Both August and September fell by 22.43p and 18.64p respectively but retained a healthy premium to the front month in excess of 20.00p & 40.00p. Prompt prices also declined with the spot and day ahead contracts down by 29.55p and 56.05p respectively.
Baseload for the day ahead eased once again
GB baseload power futures moved lower during yesterday’s session in line with the sell off on the gas market. Power prices were also pressured by falling demand as industry wound down in advance of the two-day UK bank holiday. While EUA carbon contract did post some strong gains price movement on UKA allowances was minimal. Baseload for the day ahead eased once again on Wednesday despite forecasts for wind generation to remain low. At the close the day ahead product was priced at £125.50/MWh, down by a whopping £47.00/MWh.
August contract also kicked off on an upward trajectory
The July Brent crude contract has now expired, and August has assumed front month status. July expired at $122.84 a barrel following multiple session of gains. The August contract also kicked off on an upward trajectory and during the market yesterday added $1.36 as it settled at $116.29. While this was somewhat below the final price for July the upward momentum persists. Some reports from the OPEC meeting were suggesting that the Cartel would maintain the current production plan and that no discussion took place on suspending Russia from the quotas. This came about as global supply tightens and calls from the G7 nations for an increase in global production.
Brent crude is down slightly this morning
The UK NBP gas market is closed for both today 2nd June and Friday 3rd June for UK bank holidays. Monday the 6th June is an Irish bank holiday so the next Kore Energy market report will be issued on Tuesday 7th June. Brent crude is down slightly this morning at $113.69 a barre, ahead of OPEC+ producers meeting today to discuss production plans on the back of a drop in Russian oil output.