High levels of wind generation pressured the baseload power prompt

The UK NBP gas market pushed higher in the session yesterday

The UK NBP gas market pushed higher in the session yesterday as doubts about Russian gas supplies fuelled sentiment. Prices rose across the board, with the Winter 2022 contract leading the way, gaining 16.70p to finish at 341.11p. Further out, the Summer 2023 contract added 5.26% to finish at 214.69p. The front month of July saw a more modest rise of 3.22p to finish at 186.84p reflecting sentiment that the system is reasonably supplied in the near term. A number of Norwegian outages have been ongoing in recent days, but these are expected to ease from June 24th with roughly 34MCM of supply coming back on-line.

Prices turned lower during trading yesterday

High levels of wind generation pressured the baseload power prompt and prices turned lower during trading yesterday.  With wind generation out turning 20% above the seasonal norm a large tranche of conventional gas generation was displaced.  The day ahead baseload contract settled at £186.00/MWh, down by £37.75. The benign prompt was not enough to keep a lid on near term baseload futures as July firmed on higher gas and EUA carbon costs. The front month contract closed at £205.00/MWh up by £7.05 and at a premium of £65.00 to the day ahead index for June.

  Crude oil markets traded rangebound for much of yesterday’s session

Crude oil markets traded rangebound for much of yesterday’s session with many participants staying on the side-lines as they tried to assess the potential for a global recession and how that would impact on crude oil demand. Inflation continues to impact significantly on many of the world’s major economies with interest rises the key tool in attempts to stem the tide.  Recent increase by the US Federal Reserve has resulted in a stronger dollar which in turn has put pressure on crude oil prices as the commodity becomes more expensive for holders of other currencies. At market settlement yesterday the Brent crude contract for August delivery was priced at $110.05 a barrel.

Early trading on the UK NBP market has seen some contracts move lower

Forecast gas demand in the UK this morning is running at 214MCM with supplies coming in below that figure at 207MCM.  Interconnector exports to continental Europe make up a large proportion of demand and nomination for today are pitched at 90MCM. Early trading on the UK NBP market has seen some contracts move lower.  The front month July is down marginally by 1.49p while the bellwether Winter 2022 is priced at 335.00p/them, down by 6.11p.  The gas prompt has yet to trade but currently indications suggest pricing on par with yesterday’s level.  Brent crude is priced at $110.50, up by 45 cents.  

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