Oil prices are at the lowest levels observed since February

Volatile session on Friday saw the UK NBP market continue to shed some of the premium

A volatile session on Friday saw the UK NBP market continue to shed some of the premium for the remainder of 2022 and further out, to extend the recent gains. Contracts for a September delivery fell by 5.54p to settle at 373.63p. Further out, gains were extended with 2023 rising by an average of 3.57p or 1% and 2024 rising by 5.69p or 2.34%. UK to Belgium exports rebounded from 19 MCM on Thursday to 50 MCM on Friday as a filter system issue was resolved. Further inspections and remedial works are scheduled to take the interconnector offline again on August 11th. Planned maintenance will also see the Norwegian St Fergus terminal taken offline from August 8th to the month end. Port data confirms 6 laden LNG vessels are scheduled to berth at UK terminals by month end.

Baseload futures out to the winter eased on Friday

Baseload futures out to the winter eased on Friday in response to the fall in corresponding contracts on the NBP curve. Contracts past this settled higher with supply uncertainty still adding premium.  The September contract declined by £6.00/MWh on Friday while the winter contract shed £8.25/MWh to close at £572.25/MWh. Baseload for the day ahead received support from forecasts for lower than average wind generation for the week ahead while a rebound in the NBP prompt also provided some upside. Wind generation is forecast to be around 2.0GW for Monday.

Brent crude oil prices gained across the front half of the curve on Friday

Brent crude oil prices gained across the front half of the curve on Friday with the front month of October rising by $0.80 to settle at $94.92 a barrel.  Global recessionary fears and the prospect of weaker demand offset to a degree by bullish jobs data released by the US Bureau of Labour. The positive employment news supported the US dollar index hinting at the resilience of the US economy. Nevertheless, oil prices are at the lowest levels observed since February as tighter European and US monetary policies raise concern that growth levels will slow impacting energy usage.

NBP futures relatively flat to Fridays close

NBP futures have eased off their opening and are now relatively flat to Fridays close. September, the front month, last traded at 372.80p, down 0.83p while the October contract is at 421.80p.  Prompt prices are looking to a short gas system and the spot is up 23.95p in early exchanges.  Today’s demand for the GB gas system is forecast at 210MCM and supplies are lagging by just 3MCM. An outage occurred at the Sleipner field on Sunday and is still causing issues with capacity this morning with around 8MCM of supply impacted according to Gassco, the Norwegian operator. Crude oil prices are down by around 55 cents a barrel this morning.

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