Energy markets spooked this morning

22 August 2022

NBP futures settled higher again on Friday

There was no change in market sentiment on Friday and NBP futures settled higher again with outages on Norwegian feeds adding to supply concerns.  The front month settled almost 5.00p higher on Friday but after a bullish week in the market it was 65.00p up.  The winter contact added 15.63p on Friday, to close at 607.38p.  An outage at the Karsto facility curbed Norwegian supplies by around 20MCM on Friday however, the GB gas system coped well and actually had a surplus by the end of the session.  The prompt settled lower on the day with the spot and day ahead products easing by 13.40p and 12.45p respectively, while the balance of month fell by 23.00p to 372.05p.  

GB baseload power futures also increased on Friday

GB baseload power futures also increased on Friday as the curve tracked movement in NBP futures while higher carbon also added support.  The front month gained £15.00/MWh on the day and ened the week £63.00/MWh higher at £425.50/MWh.  Carbon EUAs gained just over 2.0% on Friday and the spot closed at €97.59 per tonne.  Forecasts for increased temperatures for the week ahead added support to the prompt with the baseload product adding £10.42/MWh.  Increased cooling load coupled with low wind generation are expected to see supply margins tighten going into the week.  

Crude oil markets were steady on Friday

The crude oil markets were steady on Friday with both benchmarks posting minor increases on the day while Brent was $1.43 a barrel down on the week. The October contract settled at $96.72 a barrel and gained 13 cents but further gains were prevented by the strong dollar and fears of weaker oil demand.  Crude oil prices rose earlier in the week with positive economic data from the U.S. while the world’s largest producer also exported a record 5m barrels of oil per day last week with the majority heading to Europe to replace Russian supplies.  

Nord Stream 1 requires maintenance and will be taken offline for three days

The news that Gazprom is close the Nord Stream 1 pipeline for unplanned maintenance at the end of the month has spooked the energy markets this morning.  The Russian energy giant has said the remaining operating processor requires maintenance and will be taken offline for three days from 31 August.  NBP futures have opened with strong gains and moved higher with September last trading at 556.46p.  Contracts past the front two months have not traded but bid and offer prices on seasonal contracts are wide.  Prompt prices have been pulled higher by the gains on the near curve this morning.  Brent is trading down by 90 cents a barrel at $95.82 a barrel.
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