Gazprom to reduce Nord Stream flows

26 July 2022

Gazprom indicted on Monday that further delays may be on the horizon

The overriding upward sentiment in the UK gas market continued during Monday’s session, as uncertainty surrounding Nord Stream flows prevailed. The front month contract August made gains of 8.29 pence per therm to settle at 320.47p. However, the uptick was more evident further along the curve with the remaining months of the year gaining 29.13 pence per therm on average. Gazprom indicted on Monday that further delays may be on the horizon for the full operational return of Nord Stream 1 due to issues surrounding the paperwork which accompanied the gas turbine. The Russian gas giant added further pressure in the afternoon when it announced it would reduce Nord Stream flow flows to 20% capacity on Wednesday.  

Baseload futures edged higher on Monday

Baseload futures edged higher on Monday, tracking the upward momentum in the UK gas market. Gains were most evident in the front month August which added £30.98 to settle at £320.48/MWh. Significant gains were also seen in the Winter 22 contract which ended the day up £25.50 to close at £485.50/MWh. UK power prices found further support in the wider fuel mix, with carbon and oil closing in positive territory. EUA spot closed at €75.97 per tonne up 17 cents while Dec 22 contract gained 19 cents to settle at €76.34 per tonne.  

It was another volatile session in the crude oil markets

It was another volatile session in the crude oil markets, but bucking the trend of the previous three days, Monday closed with Brent Crude gaining across the curve. The near term saw the largest rise, with contracts for September delivery gaining $1.95 to finish at $105.15. The weakening of the US dollar and recent gains on the Dow Jones Industrial Average Index providing a boost to crude oil prices. Libya’s National Oil Corporation (NOC) have announced plans to bring production levels back to 1.2m bbl/day within the next two weeks, claiming current production is at 0.86m bbl/day. Conflict however continues in the country clouding these aspirations.  

 Prompt prices have firmed this morning

NBP futures have continued where they left off yesterday evening and near months are up by around 28.00p.  The winter last traded at 455.00p which is 25.32p up on last nights close.  Prompt prices have also firmed this morning with a short gas system adding to the upside as the spot traded above the 300.00p marker. GB gas demand is pitched at 209MCM for today and supplies are trailing by just 5MCM. In the crude oil markets, Brent for September delivery has gained $2.12 a barrel, last exchanging at $107.27 a barrel.  
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