UK gas prompt prices moved in the opposite direction
NBP futures edged higher once again yesterday, as the market remains extremely sensitive to further supply disruptions. Contracts for gas delivery in the remaining months of 2022 took the main brunt of the upward momentum, with September the front month gaining 32.58p to settle at 389.82 pence per therm while the remaining months gained 33.08p on average. Despite the robust upward sentiment there was no major fundamental changes during the session which highlights the slightly erratically market sentiment. UK gas prompt prices moved in the opposite direction, with prompt contracts shedding 32.20p on average. However, the price differential between the TTF and NBP day-ahead contracts hit a high of 249.79 pence per therm.
UK Baseload prices rallied on Wednesday
UK Baseload prices rallied on Wednesday, with future prices tracking the gas market. Winter 22 settled at a record high of £584.75/MWh, an increase of £19.25 while September the front month gained £16.50 to close at 358.00/MWh. GB spark spreads remain historically high with Winter 22 spark spread at £200/MWh. Gains along the prompt were modest compared to future prices, with the day ahead contracting gaining £6.55 to settle at £269.71/MWh. Unseasonable low wind generation supported the upward sentiment.
Oil prices continued their downward trajectory
Oil prices continued their downward trajectory in the early hours of trading on Wednesday, as higher than expected output of US crude stocks pressured the market. Data released from the US Energy Information Administration highlighted a 5.5-million-barrel increase in output, a significant uptick compared to the 73,000 barrels projected. However, Brent crude eventually crawled back, with the front month October settling at $97.40 a barrel while the US equivalent, WTI closed at $91.93 a barrel, an increase of $1.09 and $1.43, respectively. The late upward momentum arose from lower than expected US inflation data coupled with a weakened US dollar.
UK gas prices have continued where they left off yesterday
UK gas prices have continued where they left off yesterday, with September the front month up 9.19p this morning at 399.01 pence per therm while the Day ahead contract is at 327.00 pence, an uptick of 67.48p. The UK gas system has opened 12 MCM undersupplied, with forecast demand at 189MCM as power station demand outpaces interconnector exports due to low wind generation and an increase in cooling demand. The wider energy mix has also opened higher, with the Brent crude front month currently trading at $98.20 a barrel, up 80 cents from yesterdays close while WTI is up 72 cents at $92.66 a barrel. EUA Dec-22 carbon contract is up 70 cents at €83.00/tonne.