Carbon EUAs continued to rise yesterday

 A volatile session saw the UK NBP market remain flat for the September

A volatile session saw the UK NBP market remain flat for the September and Winter 2022 contracts while extending moderate gains elsewhere on the curve. UK demand for gas settled at 46 MCM yesterday, above the seasonal normal and boosting NBP prompt prices with a day on day increase of 6%. A decrease of 5.5 MCM in Norwegian flows via the Langeled pipeline added further pressure to the system on Wednesday. LNG supply to UK terminals remains steady with seven vessels expected to berth by September 14th and algorithmic data suggesting a further four will arrive. Contracts for a September delivery dipped 2.38p to settle at 439.96p, while the Winter 2022 contract shed 0.72p to end the day at 599.57p.  

 GB baseload power hit a new record high yesterday

The winter contract for GB baseload power hit a new record high yesterday closing at £625.50/MWh.  The contract was supported by higher carbon and earlier gains on the NBP.  Near contracts settled higher yesterday apart from Quarter 4 which ended the session £4.50/MWh down and has narrowed the premium to the Q1-2023 price. Carbon EUAs continued to rise yesterday with the spot closing at the highest point since early February at €95.40 per tonne.  It is expected that demand destruction will impact prices but in the meantime the markets remain volatile.  

 US Crude oil stocks had decreased beyond expectation

Worries of a declining global demand in the face of recessionary fears helped fuel initial declines in Brent Crude oil prices on Wednesday morning. Initial declines were however reversed as data showed US Crude oil stocks had decreased beyond expectation. US crude oil stocks fell by some 7.06m barrels to 425m barrels. A strengthening US dollar has also helped make oil more expensive for foreign currency users.  West Texas Intermediate for September delivery closed at $88.11, up $1.58 a barrel while Brent settled at $93.65, up $1.31 a barrel.  

Wide intra-day swings in prices yesterday

September, the front month on the NBP curve, opened with gains of over 15.00p this morning but the latest trade was 9.92p up on last night’s close at 449.88p.  The rest of the curve remains dormant after yesterday’s wide intra-day swings in prices. On the prompt only the day ahead product has traded and is up by 3.45p at 370.00p.  GB gas demand is in line with recent days and supplies are forecast 5MCM long at 208MCM.  Crude oil prices have firmed with latest trades for October for Brent going through at $94.76 a barrel up $1.11 a barrel.

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