UK gas futures closed higher for the second consecutive session
UK gas futures closed higher for the second consecutive session on Tuesday, despite a late selloff. September the front month hit an intraday high of 508.00p before falling back to settle at 442.34 pence per therm, up 19.59p from the previous session. Contracts for the remaining months of 2022 also made strong gains of 18.33p on average. The bellwether Winter 22 gas future contract climbed to a high of 621.74p per therm before closing at 560.29 pence, up by 13.82p on the day. Gains were curtailed by the selloff in the afternoon, as the market realised fundamentals remained relatively flat. The upward momentum outlined the change in the global gas dynamic, where pricing and market moves are more reflective of global pressures than that of sentiment.
Carbon prices also ended the session in positive territory
GB baseload prices pushed higher in tandem with the futures on the NBP gas curve yesterday. The September contract settled £14.50/MWh higher at £395.50/MWh while Winter 22 closed at £621.30/MWh up £4.30/MWh. Further along the curve prices pushed even higher, with 2023 seasonal contracts gaining £18.75/MWh on average. Low wind generation alongside high gas prices supported prompt contracts, with Baseload for the day ahead settling at £404.50/MWh, up £38.73/MWh from the previous session. Carbon prices also ended the session in positive territory, the EUA Dec 22 contract settled at €92.08 a tonne, up €1.37.
Tuesday’s Brent crude market did not shy away from volatility
Tuesday’s Brent crude market did not shy away from volatility, with the commodity hitting an intraday high of $95.95 before reversing gains to settle at $92.34 a barrel, down $2.76. Elevated demand concerns on the back of a weak economic outlook continued to pressure the market. As China’s central bank cut lending rates in an attempt to stimulate their economy following Covid 19 lockdowns. On the supply outlook, the European Union has continued to work with Iran on reviving the 2015 nuclear deal which could see the lifting of sanctions. The prospect of a return in Iranian oil supplies added further pressure to the market, as the country has the capacity output of 3.7 million barrels a day.
UK gas prices have opened firm this morning
UK gas prices have opened firm this morning, with September the front month trading at 466.23p up 23.89 pence per therm from Tuesday’s close. Summer 23 has also made strong gains of 25.79p to trade at 510.00 pence, while the remaining future contracts are yet to trade. Despite the UK gas system opening relative balanced this morning prompt contracts have pushed high, the spot and day ahead contracts are trading at 395.00p and 400.00p, respectively. Brent crude market has not stayed away from its previous settlement, currently trading at $92.33 a barrel while WTI is up 28 cents from yesterday close at $86.46 a barrel.