There’s growing confidence that Europe can balance its needs this winter
There were declines for the upcoming Winter contracts on the UK NBP market yesterday. Despite the continued curtailment of Russian flows via the Nord Stream pipeline, premium built in following Gazprom’s Friday evening announcement has waned. The prospect of operating the market without Russian gas was already priced into the system and there’s growing confidence that Europe can balance its needs this winter in the absence of Russian supplies. Planned Norwegian maintenance is expected to reduce available capacity by around 100 MCM a day from September 7th to 20th. UK LNG imports remain healthy with 1.2M tonnes more already imported for 2022 than for the calendar year of 2021. Contracts for October and Winter delivery fell by 34.42p and 24.07p to settle at 428.18p and 581.10p respectively.
UK baseload power market retraced most of the gains added in the previous session
The UK baseload power market retraced most of the gains added in the previous session as measures to intervene in energy market became more of an issue. Falls in the UK NBP gas market were also evident as the loss of Russian supply via the North Stream 1 pipeline was adjudged to be priced in before the market climbed on Monday. Baseload futures contracts out to Summer 2023 lost significant premium with the December 2022 contract being the notable exception. the day ahead contract was also pressured by forecasts for temperature remaining above the seasonal norm. Day ahead shed £55.00 to close at £280.00/MWh.
West Texas Intermediate for October shed $2.73
Demand concerns and a strong dollar rocked the Crude Oil markets yesterday with the contract for November falling $2.91 to settle at $92.83. Ongoing Covid restrictions in China continue to influence the demand outlook in the world’s second largest oil market. European interest rates are expected to rise markedly following the European Central Bank meeting on Thursday with a scheduled US Federal Reserve meeting on September 21 widely anticipated to result in a similar rate rise. West Texas Intermediate for October shed $2.73 to settle at $86.51 a barrel.
Crude Oil prices have reversed some of the previous day’s losses
The gas markets have opened lower this morning as premium built in following Gazprom’s Friday evening announcement continued to fall off. A further 10.18p has come off the October contract on the NBP. The latest trade for October was at 418.00p with the UK system forecast to be 13.1 MCM long bringing the prompt prices lower. The Winter 22 contract has last traded at 565.00p down 16.10p on the closing price from yesterday. Crude Oil prices have reversed some of the previous day’s losses with the last trade at $93.74 up $0.91 on the previous close.