After two days of declines Carbon EUAs rebounded yesterday

The prompt also settled higher yesterday

The front month of the NBP curve relinquished the gains from the morning session on Monday, however, contracts from the winter out remained higher on the day.  Russian gas supply concerns drove European gas prices higher yesterday and all near contracts on the NBP curve, apart from July and August closed higher.  The front winter received the lion’s share of risk premium as the contract closed 8.61p higher at 298.58p.  The prompt also settled higher yesterday although the sharp increases from early morning were pared back over the session to leave the spot and day ahead products 25.60p and 29.70p up on Friday’s previous close.

 Baseload for the day ahead settled higher

The early gains on the NBP futures curve buoyed baseload power contracts yesterday.  The front month settled £3.65/MWh higher at £202.50/MWh while the winter contract posted a similar gain to close at £283.00/MWh.  After two days of declines Carbon EUAs rebounded yesterday with contracts out to 2024 closing around 2.1% higher. Baseload for the day ahead settled higher on Monday with forecasts for low wind generation providing support.  Gains on the NBP prompt also added to the upside yesterday.  Wind generation is not expected to exceed 2.0GW on Tuesday.

Supplies remain tight due to the sanctions on Russian oil

After Friday’s significant sell off, the crude oil markets paused on Monday as the Brent contract for August recovered by just over a dollar a barrel.  Supplies remain tight due to the sanctions on Russian oil, but Libya’s oil production has improved from last week’s levels when output was less than 10% of capacity and is expected to rise to around 700,000 battels per day this week.  Fears of demand deconstruction in the United States curbed the upward movement on the day as pump prices there exceed $5.00 a gallon.  The U.S. markets were closed yesterday due to the new June public holiday so trading was subdued for the WTI contract which settled 61 cents a barrel higher at $110.17 a barrel.

Crude oil prices have continued to climb higher this morning

Once again, the volatility is evident in the gas market as near futures bounce back and forth this morning. The July contract peaked at 217.71p earlier but last traded at 210.01p, which is 9.17p up on last night’s close while the winter contract has yet to trade.  The spot and day ahead products have opened around 20.00p higher although trading has been thin on the prompt.  The GB gas system is finely balanced this morning with demand forecast at 221MCM.  LNG nominations for the day are around 45MCM and UK ports are expecting at least 14 cargoes to replenish stocks over the next four weeks.  Crude oil prices have continued to climb higher this morning.

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