Damaged filters halted flows on the Bacton Zeebrugge
With the return of Nord stream 1 following maintenance, the gas markets softened through the morning but later in the session much of the early gains were reversed. Confidence in Russian gas supplies is still shaky, and the market reflected that yesterday as August and September ended 27.81p and 5.87p higher to finish at 296.13p and 334.75p respectively. The Winter 22 contract shed 2.64p to finish the session at 392.26p. Damaged filters halted flows on the Bacton Zeebrugge interconnector, which will be offline until further notice. Forecasted nominations for today are 223 MCM, significantly above the seasonal normal of 161 MCM.
Baseload for the day ahead fell sharply on Thursday
Baseload for the day ahead fell sharply on Thursday despite forecasts for wind generation to be below average going into the weekend. Wind generation is forecast around 2.0GW for Friday but issues with the gas interconnector from Bacton to Zeebrugge impacting flows, could mean gas is stranded in the UK tomorrow. At the close the day ahead contract was £33.85/MWh down. Baseload futures followed a similar arc to NBP gas futures yesterday with early losses being reversed late in the session. The August contract settled £20.30/MWh higher at £283.80/MWh while the front winter settled at £452.50/MWh shedding £7.00/MWh.
The expected interest rate hike from the ECB was announced yesterday
The expected interest rate hike from the ECB was announced yesterday as the block tries to tackle inflation levels. At 50 basis points it was at the upper range of expected increase and is the first interest rate hike in over ten years and is a concern for oil demand. Crude oil prices opened lower on the day and losses were extended to over five dollars for Brent, but as the session wound down, prices recovered a touch leaving Brent $3.06 a barrel down at $103.86 a barrel. More worries for demand came with news that Shanghai is extending mass testing into August to suppress the spread of the latest variant of the coronavirus. This comes on the back of a significant increase in U.S. gasoline reserves reported by the EIA earlier this week.
Crude oil prices opened firmer
The late gains from yesterday afternoon have continued into the gas markets this morning. The front month contract for the NBP, August, is 21.86p up at 317.99p while September last traded at 351.72p, up 16.97p. Prompt prices are also on the rise with the spot 12.80 up as the GB gas system is short by 14MCM this morning. Crude oil prices opened firmer with Brent reaching $105.72 in early trading, but the markets have reversed direction and Brent last exchanged at $103.18 a barrel, down 68 cents.