Volatile swings were acute across the gas curve in the late afternoon
UK gas forward products continued to price in an increasing amount of supply risk premium during yesterday’s session, as NBP gas contracts remained in uncharted territory. The front month contract, September smashed another record during the session, peaking at 620.48 pence per therm before falling back to settle at 590.71 pence, up 43.93p on the day. Volatile swings were acute across the gas curve in the late afternoon, with the front season Winter 22 reaching 762.19p before scaling back to end the day at 774.98p, an increase of 66.12p. A tight UK gas system, on the back of both planned and unplanned maintained lifted the spot and day ahead contracts 20.00p and 22.55p respectively.
GB baseload power market went higher once again on Thursday
The GB baseload power market went higher once again on Thursday, as record high gas prices alongside low wind output continued to drive prompt and future market contracts. The front month September contract edged £24.40/MWh higher to settle at £522.00/MWh while the front season Winter 22 gained £46.00/MWh to end at the day at £795.50/MWh.
Brent crude prices remained relativity flat
Brent crude prices remained relativity flat during the early hours of Thursday, as the ever-evolving market fundamentals continued to influence the oil market equilibrium. OPEC+ have stated that they may cut supply, as the oil powerhouse Saudi Arabia have flagged concerns surrounding the disconnect between future and physical markets, which has been driven by fears of a global economic slowdown, potentially leading to a drop in oil demand. However, prices slumped in the afternoon as the market reacted to the potential return of Iranian oil exports as talks progress positively, coupled with worries of rising US interest rates. Brent crude for delivery in October settled at $99.34 a barrel, up $1.88 on the day.
UK gas market has failed to hang onto yesterday’s uptick this morning
UK gas market has failed to hang onto yesterday’s uptick this morning, with a clear downturn at the opening. The front month September opened at 544.99 pence per therm down 45.72p from yesterday’s settlement, while Winter 22 is currently trading at 750.00p a decrease of 24.98 pence per therm. Prompt contracts have yet to trade, as the UK gas system as opened relatively balanced with demand forecast at 215MCM. UK gas interconnector exports to Europe remain robust at 92MCM, as supplies remain tight across the continent. Brent crude front month edged higher this morning and is currently trading at $100.48 a barrel up $1.14.