Late surge saw the UK gas market post extensive gains

 Six LNG deliveries are expected to berth at UK terminals by month end

Following a slight decline on Friday, a late surge saw the UK gas market post extensive gains right across the curve yesterday. Gains of roughly 6.50% were observed for the remainder of the year with the front month of September rising by 26.96p to settle at 422.75p. Current Norwegian capacity restrictions are to remain at 29 MCM before rising to around 39 MCM per day from September second. The heatwave experienced across the continent recently has increased the demand for colling which with limited wind output has placed additional demand on gas-fire powered generation. Six LNG deliveries are expected to berth at UK terminals by month end, up from four received for the month so far.  

 Wind generation levels are to pick up this week

GB baseload power futures rose on back of the general increase across the energy prices across Europe yesterday.  Near curve contracts were up by around 2-3% through to the afternoon before a late surge saw gains almost double within the closing two hours. September settled at £381.00/MWh up £18.50, while the front winter moved to £617.00/MWh. Prompt prices did not escape the rush up in prices yesterday as the day ahead contract settled £43.98/MWh higher.  While wind generation levels are to pick up this week, levels are still forecast below the average the time of year.  

A Day of brisk trading ended with Brent Crude oil prices shedding premium

A day of brisk trading ended with Brent Crude oil prices shedding premium across the curve yesterday. Chinese refinery output has dropped to the lowest level seen since March 2020 raising demand concerns in the world’s second largest economy. Positive news regarding the resurrection of the Iran nuclear deal, potentially increasing global supply by over 1M barrels a day, added pressure to Brent Crude prices, further extending the losses. Contracts for an October delivery settled down $3.05 at $95.10 a barrel. West Texas Intermediate posted similar losses with contracts for the front month shedding $2.68 to end the day $89.41 a barrel.  

Crude oil prices have softened in overnight trading

Both the prompt and near curve on the NBP have continued to move higher this morning.  The day ahead last traded at 389.00p, which is 19.75p up on Monday’s close.  On the curve, the front month September has added 20.81p in early trades while contracts from the winter out have yet to trade.  Crude oil prices have softened in overnight trading in Asian markets and early exchanges in Europe. Brent, the global benchmark is down $1.33 to $93.77 a barrel.    

Learn how Kore Energy can help you to develop a sustainable energy management system