The UK NBP market reversed some of the recent losses

Further Russian supply interruptions via the Nord Stream 1

The UK NBP market reversed some of the recent losses posting marginal gains in a turbulent session yesterday. Further Russian supply interruptions via the Nord Stream 1 fuelled concerns surrounding the winter storage levels, with contracts for a Winter 22 delivery experiencing the greatest pressure. The front month of September saw a modest drop of 2.69p to finish the session at 349.23p, but further out, the Winter 22 contract gained another 19.10p to end at 470.28p. Norwegian supply via the Langeled pipeline rose by 7% to 70.1 MCM on Monday providing some relief to supply concerns. Four LNG deliveries are scheduled to berth at UK terminals by August 16th with another six expected based on algorithmic data.  

 Wind generation in the UK is expected to exceed 12.5GW on Tuesday

Wind generation in the UK is expected to exceed 12.5GW on Tuesday and the prompt responded yesterday.  Baseload for the day ahead was marked down by 19.8% or £59.50/MWh and settled at £240.50/MWh, the lowest close in over a week. Wind is expected to remain above average for the remainder of the week. GB baseload futures generally tracked movement on the NBP curve with contracts for winter months adding premium.  The front months settled just £0.70/MWh higher yesterday while the winter contract closed £20.25/MWh higher.  

A weaker dollar curbed losses on the day

The latest U.S. economic data sent crude oil prices plunging on Monday snapping a three-day winning streak.  The July purchasing managers index was the lowest in a year, reigniting fears of recession in the world’s largest economy.  The report came on the back of similar data from Europe and Asia showing factory activity contracting as global demand slows. A weaker dollar curbed losses on the day as October, the new front month for Brent settled at $100.03 a barrel shedding 3.8% or $3.94 a barrel on the day. The September contract is still the front month for West Texas Intermediate and declined by 4.7% to settled at $93.89 a barrel.  

Brent has traded within a tight range

GB gas demand is down at 165MCM this morning and supplies are forecast to run 15MCM long.  The system’s comfort has seen prompt prices on the NBP open softer this morning. The spot and day ahead are down by close to 10.00p with last trades going through at 254.00p and 255.00p. In contrast, the near curve has opened firmer with September exchanging 12.77p higher at 362.00p. The winter has yet to trade but supply concerns continue to offer support. Brent has traded within a tight range and is currently 69 cents down at $99.35 a barrel.  

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