UK NBP gas market has opened with strong gains

29 June 2022

NBP prompt prices posted gains during Tuesday’s session

NBP prompt prices posted gains during Tuesday’s session on the back of stronger than expected demand. The UK system demand was at 214mcm, significantly higher than the seasonal average of 171mcm, as a result Within day settled up 15.00p at 160.05 pence per therm while Day ahead gained 20.00p to end the session at 158.50 pence per therm. July the front month contract shed 5.16p to settle at 166.75 pence per therm, shrugging off the loss of LNG disruption from US Freeport facility. However slight gains were evident on all other curve contracts as risk for winter continues to be priced into contracts. Winter-22 ended the session at 337.06 pence per therm, up by just 0.82 pence from the previous day.

GB baseload power prices rose  yesterday

GB baseload power prices rose  yesterday on a combination of bullish carbon and higher fuel input costs.  Much of the price pressure was at the front of the curve where Q3 2022 increased by £9.10 to close at £234.50/MWh.  Other contract further out the curve were less impacted as gains averaged less than £1.00.  EUA carbon contracts firmed for the second session in a row with just over €3.00 added across all periods.  The spot closed at €87.13 per tonne, up €2.98.  Contracts for 2022 to 2024 settled in a range from €87.61 to €96.48 per tonne

Brent crude continued its upward trajectory

Brent crude continued its upward trajectory during Tuesday’s session, taking direction from the unlikelihood of an increase in oil production from key producers in UAE and Saudi Arabia. The commodity opened at $115.41 a barrel and eventually settled up by $2.89 at $117.98 a barrel. Global oil supplies may face another obstacle, as geopolitical tension has heightened in Libya where a force majeure on oil exports from key export terminals is on the horizon. The north African nations typical output is 1.2 million barrels per day. Similarly, Ecuador may also cease oil production of up to 850,000 barrels a day as political tensions intensify.

Crude oil markets are trading relatively flat

The UK NBP gas market has opened with strong gains this morning and near-term contracts are trending up by 15.00p.  The imminent expiry of both the July and Q3 2022 contracts will inevitably lead to increased buying activity.  In addition, ongoing maintenance in the North Sea gas fields has reduced send out from the area.  These factors are amplified by the fact the restrictions remain on the Nord Stream 1 pipeline into Germany.  Winter 2022 also remains elevated with latest trades going through at 353.00 /therm.  Crude oil markets are trading relatively flat with Brent crude priced at $118.10 a barrel.  
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