Gas price volatility remained a feature during the market on Friday

Gas prices were weaker when the market opened

Gas price volatility remained a feature during the market on Friday with contracts correcting lower following the previous session’s gains.  Gas prices were weaker when the market opened, and near-term contracts extended losses throughout the session.  The front month July contract fell by over 17.00p as it settled at 169.74p on the day and by just under 22.00p over the course of the week.  Other contracts out to Winter 2022 finished lower by 10.00p o average but were still much higher over the full week.  The losses came as the EU commission and Norway issued a joint statement agreeing to boost Norwegian gas supply to Europe for the coming Winter.

Baseload power futures gave up some premium on Friday

Day ahead baseload power for the weekend and today remained under pressure as high levels of wind generation kept the system well supplied.  Power from renewable sources is expected to remain high for the rest of the week with 7.8GW expected.  Weekend power fell to £147.00/MWh while power for today was priced at £164.50/MWh. Baseload power futures gave up some premium on Friday as this market was pressured lower by the weekend prompt and lower gas input prices.  The front month contract shed £13.50 to close at £191.50/MWh while Winter 2022 was down by £2.50.

Crude oil markets staged a mini recovery on Friday

Crude oil markets staged a mini recovery on Friday as following two sessions of losses as prices finished in positive territory.  For some time now OPEC producers have fallen short of their production targets, and this has added to the tightness in the market.  Productions costs have been increasing and recent interest rate rises have seen investment in the industry decline.  The fears that the global economy will fall into a recession continues to provide a downside for oil but on Friday the focus was clearly on supply side issues.  The Brent crude contract for August delivery rose by $3.07 to close at $113.12 a barrel and finished flat over the week.

The gas prompt is trading at a similar level to last Friday

Forecast gas demand in the UK this morning is running at 224MCM with supplies coming in below that figure at 218MCM.  LNG send out is ramping up and should quite easily deal with the small deficit of 6MCM. Early trading on the UK NBP market has seen some contracts move lower.  The front month July is down marginally by 3.84p while Winter 2022 is yet to trade although bid/offer spreads would suggest downward movement.  The gas prompt is trading at a similar level to last Friday.  Crude oil markets have flipped between gains and losses over the last hour with Brent now priced at $112.68 a barrel.  

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