China and India have become Russia’s top oil customers

Early gains to the prompt and near curve for the NBP were reversed

Early gains to the prompt and near curve for the NBP were reversed early Monday afternoon following news of an unplanned outage at the Ormen Lange Field. The outage at Ormen Lange could curb Norwegian imports by up to 13MCM until the start of next week according to Gassco, the Norwegian gas operator. Near futures settled mixed yesterday, as the front month had traded lower by around 8.00p in early trading but then recovered and moved higher to peak at 176.66p before settling at 171.91, up 2.17p day on day.  On the prompt, the spot and day ahead products yielded early losses too as the spot settled with a gain of 1.50p while the day ahead closed 4.05p down.

 Wind generation is expected to be double Monday’s level

Forecasts for increased wind generation pressured the day ahead product for baseload power on Monday as the contract settled 24.2% or £49.80/MWh lower.  Wind generation is expected to be double Monday’s level, getting close to 10.0GW on Tuesday.  Baseload futures settled mixed on Monday with July adding £3.75/MWh, while August declined by £5.20/MWh. Carbon EUAs recovered by just under 1.0% on Monday as the spot closed at €84.15 per tonne, up 80 cent.  Contracts for 2022 to 2024 settled in a range from €84.61 to €93.28 per tonne.

The crude oil markets moved higher yesterday

The G7 are to propose harsher sanctions on Russia following this week’s meeting of the leaders in Germany.  The group are to target Russia’s gold exports while also seeking to put a cap on the price of Russian oil.  This may be difficult to achieve because China and India have become Russia’s top oil customers.  The crude oil markets moved higher yesterday with the possibility of supplies tightening further and Brent settled almost two dollars a barrel higher at $115.09 a barrel.  Supply woes were exacerbated with news that Libya and Ecuador may have to cut production this week due to unrest and anti-government protests.

 Prompt prices in UK have opened firmer this morning

Prompt prices in UK have opened firmer this morning with the spot and day ahead products last trading at 155.00p.  Near futures are within a penny of yesterday’s close with the market seemingly unsure which direction to take.  Longer curve contracts have yet to trade.  The GB gas system is balanced with demand for today down at 210MCM due to increased wind generation displacing gas fired generators in the power stack.  Norwegian deliveries are slightly ahead of Mondays despite the outage at Ormen Lange.  Crude oil prices have continued to rally with Brent a further $1.62 a barrel up while WTI has added $1.45 a barrel in early exchanges.  

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