Ongoing supply concerns pushed curve products to record highs
UK gas prices opened higher during yesterday’s session and sustained the upward trajectory throughout the day, as ongoing supply concerns pushed curve products to record highs. Winter-22 gained 32.18p to settle at 591.75 pence per therm while Summer-23 ended the day at 520.86p, an increase of 31.02 pence per therm on the day. The division between UK gas prices and Europe grew deeper, highlighting those who are directly affected by lower Russian gas exports. UK gas for delivery in September settled at 456.00p while the Dutch equivalent closed 135.73p higher at 591.73 pence per therm. Prompt prices also ended the day higher, as an unplanned outage at Norway’s Karsto gas treatment plant intensified supply concerns, with over 19MCM impacted. Strong demand fundamentals supported the upward sentiment, as UK gas demand hit 204MCM well above the seasonal average of 164MCM. Spot and the day ahead contract settled at 380.05p and 376.50 pence per therm respectively.
GB baseload far curve contracts surged
GB baseload far curve contracts surged during yesterday’s session as risk premiums continue to mount. The uptick in prices was particularly evident in Summer-23 and Winter-23 products which both gained £16.50/MWh and £21.00/MWh respectively, while Winter-22 settled at £634.50/MWh an increase of £9.00/MWh on the day. Baseload for the day ahead moved in the opposite direction, down £17.14/MWh yesterday to settle at £372.86/MWh. A forecasted increase in wind generation output pressured the contract.
Crude oil prices pushed high during Thursday’s session
Crude oil prices pushed high during Thursday’s session, amid a forecasted drop in Russian supplies which may offset demand concerns. However the upward sentiment was not clear in the early hours of trading, when Brent crude front month September hit a low of $93.05 a barrel, its lowest level since before the Russian invasion of Ukraine. An uptick in the market soon followed, with the front month eventually settling at $96.59 a barrel, an increase of $2.94. Strong US economic data coupled with an increase in fuel demand also supported the market during yesterday’s session, as the US is the world’s number one oil consumer. WTI prices followed a similar pattern, up $2.39 a barrel to end the day at $90.50.
UK gas market has opened relatively flat this morning
The UK gas market has opened relatively flat this morning, with the front month trading at 455.14p per therm, down 0.86 pence from yesterday, all other future contracts are yet to trade. Liquidity in the prompt market is also low, with the day ahead product trading at 375p, up 1.50 pence per therm. The GB gas system is forecast 14MCM oversupplied against today demand of 195MCM. Oil prices have pulled back this morning as a strong US dollar and ongoing economic concerns continue to pressure the market. Brent crude front month is down $0.97 at $95.62 a barrel.