The UK NBP market gained in the session yesterday
The UK NBP market gained in the session yesterday amid erratic movements in trading throughout the day. Prices pushed higher across the board with seasonal increases of the order of 3.41% out to Winter 2025. The front months, July and August experienced gains of 5.02p and 11.85p to finish at 205.86p and 250.54p respectively. The largest gains were observed in contracts for delivery in the upcoming winter period which rose 13.42p to finish at 312.00p. UK Storage levels remain strong, but the day ahead gained over 30.00p in response to scheduled Norwegian maintenance for next couple of days which could reduce capacity by roughly 30MCM per day.
Gains recorded on the NBP futures market fed into baseload power futures
The gains recorded on the NBP futures market fed into baseload power futures yesterday as the near curve contracts recorded an average increase of £8.60/MWh. Carbon EUAs continued to firm as well with the spot settling at €84.14 per tonne, up 55 cent per tonne. The Dec-22 contract added 60 cent to close at €84.61 per tonne.Wind generation performed poorly in the UK power stack yesterday and while still forecast to be on the low side for Wednesday it should improve and get above 2.0GW. Baseload for the day ahead eased to settle at £202.25/MWh.
Crude oil prices edged higher for a second day
Crude oil prices edged higher for a second day yesterday after hitting a three-week low on Friday. The oil markets are likely to remain tight while there’s no resolution to the war between Russia and Ukraine or supplies from the U.S. or OPEC rise sharply. The U.S. Fed increased interest rates by 0.75 percentage points last week and is expected to continue to increase rates this year to try curb inflation which may impact U.S. demand. In contrast, China’s demand is expected to recover during the summer months after Covid-19 shutdowns slowed growth during the first two quarters of the year. The August contract for Brent settled at $114.65, up 52 cents a barrel.
Gas prices continue to firm this morning
Crude oil prices have slumped this morning as Brent has traded down by around five dollars a barrel. The market has moved lower in response to a downward shift in European stocks while a call from President Biden for a fuel tax cut has also weighed on prices. Gas prices continue to firm this morning with both prompt and near curve futures showing gains in the order of 5.00p to 8.20p. The spot has moved higher due to a short gas system with demand for today at 218MCM. Langeled flows are nominated at 20MCM which is half of yesterday’s levels due to maintenance works.