September the front month claimed the largest increase
Despite the downturn in UK gas future prices during the opening hours of trading yesterday, contracts bounced back to end the day higher as supply concerns continued to linger. September the front month claimed the largest increase, settled at 379.17 pence per therm up 8.97p from the previous session. Remaining contracts for delivery this year gained 5.73 pence per therm on average. Movement along the prompt moved in the opposite direction, with the day ahead and spot losing 29.00p/therm and 28.75p/therm respectively. An unplanned outage at the IUK Bacton terminal curbed exports to the continent, however low wind generation supported power station demand which account for 40% of UK gas demand yesterday.
GB baseload futures continued to gain momentum yesterday
GB baseload futures continued to gain momentum yesterday, with contracts for delivery this year edging up £26.27/MWh on average. September the front month settled at £360.50/MWh up £9.00/MWh, however the uptick was move evident further along the curve, as Winter-22 settled at £580.50/MWh up £35.00/MWh. Unseasonable low wind generation in the UK weighed on the day ahead contract, which gained £20.49/MWh to settle at £280.23/MWh. Wind generation was 20% below seasonal norm yesterday.
Brent crude prices fell for the second consecutive day
Brent crude prices fell for the second consecutive day on Thursday, taking direction from the global economic slowdown, which has spurred on recession fears. Demand outlook remains uncertain, as economies grapple with inflation. The Bank of England announced yesterday that it would increase interest rates by 0.5% to 1.75%, its biggest increase in 25 years. The macroeconomic fears caused the crude front month to shed $2.66 and settle at $94.12 a barrel while WTI fell to $88.54. Brent crude prices surged since the beginning of the Russian invasion of Ukraine, however the commodity has now wiped out all its gains and the front month contract has settled at its lowest price since late December 2021.
Brent crude has started the day in positive territory
Demand on the UK gas system opened at 204MCM, with interconnector exports recovering to 82MCM as flows to Belgium restart following the interconnectors unplanned outage. The system is currently 17MCM undersupplied which has boosted prompt contracts, the spot is trading at 305 pence per therm up 44.70p from yesterdays close while day ahead is at 310p. Future prices have also opened higher, September the front month is trading at 391.92p up 12.75p while Winter 22 is at 480.09p, an increase of 6.09p compared to yesterday close. Brent crude has started the day in positive territory, up 40 cents at $94.52 a barrel.