Trading for NBP futures was volatile
Nominations through the Langeled pipeline were back to 64MCM on Monday and while the GB gas system was short for much of the session, both the prompt and near curve posted further losses. The spot and day ahead yielded 6.10p and 5.50p respectively while the balance of month settled at 169.00p. Trading for NBP futures was volatile with large swings in prices a feature for the near curve yesterday. The August contract settled at 193.68p, down 6.61p from Friday’s close while the front winter shed 7.31p to settle at 395.18p.
UK baseload power futures settled mixed
UK baseload power futures settled mixed on Monday with August gaining £0.50/MWh while the September contract eased by £3.40/MWh. The winter contract was marked £35.00/MWh higher with poor liquidity for the contract on the day meaning the bid price was used to set the close. The UK government published a paper to review the UK power market and is considering decoupling from gas. It will be a complex and lengthy consultation with a key challenge being to reform the setting of the marginal price.
The dollar slipped yesterday giving support to crude oil prices
The dollar slipped yesterday giving support to crude oil prices while increased concerns of tight supplies also added to the upside. Brent increased by over five dollars a barrel, to close at $106.27 a barrel, the U.S. benchmark, West Texas Intermediate settled at $102.60 a barrel up $5.01. The latest interest rate increase from the U.S. Fed was expected to be one percent, but latest indications are it will be less than that as the government tries to tackle inflation when they meet next week. President Biden returned from the Middle East at the weekend without any pledges for increased output from OPEC leaders, the U.S. has been requesting increased production in order to lower prices.
Wholesale gas prices in Britain have opened firmer
A letter to Gazprom customers declaring a force majeure on supplies has spooked the gas markets across Europe this morning. The news has come as Nord Stream 1 is undergoing scheduled maintenance works which are due to be completed on Thursday. This has raised questions as to whether gas will flow through the pipeline following maintenance. Wholesale gas prices in Britain have opened firmer with the front month last trading 23.57p higher at 217.25p. The spot has also opened over 20.00p up while the day ahead product is yet to trade. Crude oil prices have eased a touch with the September contract for Brent 73 cents a barrel down.