The NBP near curve market has opened with significant gains

09 June 2022

UK gas futures shed value for the fourth session in a row on Wednesday

UK gas futures extended losses for the fourth session in a row with contracts for Summer delivering periods coming under significant pressure especially in the final hour of the session.  Early weakness in the market was apparent as contracts opened down by between 3.00p and 5.00p from the previous close.    The July front month contract shed 6.40p to close at 129.89p while August experienced a loss of just under 5.00p as this contract closed at 160.89p.  weeks. Gas demand in the UK market has reduced in recent days as high levels of renewable generation displace conventional CCGT generation.  Prompt prices fell by a significant amount with both the spot and day ahead shedding 40.00p/therm.

GB baseload power futures moved lower

The GB baseload power curve moved lower once again yesterday as contracts were pressured by falling gas and EUA carbon contracts. Losses were extended throughout the session with much of the pressure coming on Summer months. Renewable energy sources continued to operate well above the norm for this time of year and the minimum supply margin expanded as a result. The baseload for the day ahead product settled lower by £14.50 to close at £120.00/MWh.  The EUA market is keeping a keen eye on moves by the EU to regulate investor activity in this market.  The EUA spot price shed €0.79 to close at €79.99 per tonne.

Brent crude prices closed at their highest price since March

Global crude oil prices continued in an upward trajectory on Wednesday with both the Brent and West Texas intermediate contracts adding further premium.  The market was never in negative territory as for multiple sessions in a row prices increased.  Brent crude traded in a range of just over $2.00 with the contract settling at the upper end of the scale at $123.58 a barrel, up by $3.01 from the previous close.  This is the highest settlement price since the beginning of March when the EU ban on Russian oil was first muted. The weekly US inventory data was issued yesterday with mixed movement the main output.  This news had little impact with the proposed EU ban on Russian oil the main supportive factor.

The UK gas market has surged this morning

UK NBP gas prices surged higher on opening as news emerged of an explosion at a key US LNG terminal in Texas. The front month July contract opened higher by 26.61p and firmed further to 180.00p, up by 50.11p from last night’s close. The market has eased in the last hour or so with prices for July at 152.54p, up by 22.65p from last night’s close. Both the August and September contracts have added just over 20.00p in reaction to the news. Other contracts have yet to trade as the market awaits further news on the extent of the explosion and possible duration of the outage. Crude oil markets are trading flat and have not reacted to the events in the Gulf of Mexico.  
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