Losses to baseload curve curbed by gains to carbon

The prompt market also softened on Friday

The gas market continued to decline on Friday as the issue with Sleipner field was resolved restoring Norwegian gas flows.  Near month contracts yielded around 36.00p on the day and over the week were 55.05p lower on average.  The front winter ended the week 40.38p down having shed 34.47p on Friday.  The prompt market also softened on Friday with the spot and day ahead products relinquishing over 40.00p through the session.  The balance of month contract settled at a discount to the front month at 185.00p, falling 29.50p on Friday.  LNG supplies to GB remain strong with seven cargoes expected to berth by Friday.

Carbon EUAs were marked up by 1.5% on average

With NBP futures declining sharply on Friday, the losses to baseload curve contracts were curbed by gains to carbon.  The front month, August settled at £227.00/MWh, down £28.75/MWh and this was the greatest decline recorded on Friday.  Carbon EUAs were marked up by 1.5% on average with the spot closing at €84.62 per tonne. Forecasts for low wind generation for the start of the week coupled with an increased cooling demand sent the baseload for the day ahead rocketing on Friday.  The contract gained over £117.00/MWh to settle at £332.39/MWh.

Crude oil prices rebounded on Friday

Crude oil prices rebounded on Friday with Brent gaining $2.06 a barrel to settle at $101.16 a barrel, however, over the week Brent declined $5.86 a barrel. The gain came as President Biden’s visit to the Middle East ended with an U.S. official telling reporters that they do not expect to see an increase in output from Saudi Arabia soon.  Spare capacity for OPEC members has come under question lately as the group have struggled to meet monthly production targets.  There was some positive news on the day with Libya to lift the force majeure on production which could see a return of 850,000 barrels per day to the market.

The GB gas markets have been slow off the marks this morning

The GB gas markets have been slow off the marks this morning and only the front two months are active.  There has been some yo-yoing in prices with the last trade for August at 198.44p which is 1.85p down from Fridays close.  The prompt has still to get going this morning but the bid and offer spreads are wide.  The GB gas demand is forecast at 223MCM, and supplies are lagging by 13MCM this morning.  Gas flows through Langeled are back to 64MCM for today with LNG send out down at 25MCM.  In the crude oil markets concerns of tight supplies has offset recession worries as Brent is $2.14 a barrel higher.

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