Crude oil prices have recovered some of yesterday’s sharp losses

 The spot and day ahead products gained

The unplanned outage at Sleipner continued to dog Norwegian gas exports on Tuesday and this provided support to prompt prices in the UK and Europe. The outage impacts gas flows to Zeebrugge in Belgium and Easington in the UK with flows through the Langeled line down by around 27MCM.  Gassco expect the issue to be resolved by Friday according to their website. The spot and day ahead products gained around 27.00p yesterday, while the contract for the balance of month settled 35.13p higher.  Near NBP curve contracts were buoyed by the gains on the prompt yesterday with August settling 21.78p up while contracts past the front winter recorded more modest gains.

 GB baseload futures were lifted by gains in the NBP curve

GB baseload futures were lifted by gains in the NBP curve and higher carbon prices yesterday.  The front month, August settled at £265.00/MWh, up £14.50/MWh.  The winter contract gained £20.00/MWh to close at £431.50/MWh.  Carbon EUAs for 2022 and 2023 increased by 1.8% on Tuesday and the spot closed at €85.52 per tonne. Wind generation is forecast lower for the remainder of the week, and this coupled with the higher NBP prompt propped up prompt prices for baseload power.  The day ahead settled at £266.17/MWh up £31.17/MWh.

Brent crude shed over $7.00 a barrel on Tuesday

Brent crude shed over $7.00 a barrel on Tuesday to settle below the $100 a barrel mark for the first time in three-months. It’s been a volatile period for crude oil prices with concerns of demand deconstruction vying with tight supply woes for direction.  The new highly transmissible variant of Omicron has surfaced in China resulting in fresh restrictions on travel with some lockdowns being imposed in Shanghai and there are concerns these will increase. Meanwhile the dollar has almost reached parity with the Euro and has continued to strengthen against a basket of currencies, and this is also adding pressure to crude oil prices.  President Biden is to meet with some OPEC leaders this week and will seek an increase in output, but there are questions as to whether the group has the spare capacity.

 NBP futures have opened firmer

NBP futures have opened firmer with August last trading at 292.00p which is down from the early high of 300.01p. Very little has traded past the front month, and this may be due to the wide bid/ offer spreads.  Trading on the NBP prompt has been slow to start with just the day ahead recording a deal at 302.00p.  GB gas demand is forecast at 208MCM for today, but supplies are lagging by 28MCM with flows through the Langeled feeder still restricted due the issues at the Sleipner field.  Crude oil prices have recovered some of yesterday’s sharp losses in early trading with Brent last exchanging at $100.96 a barrel.

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