The UK NBP gas market extended gains

The front of the curve came under sustained pressure

The UK NBP gas market extended gains for the second session in a row as a number of supply issues provided support. An outage on the BBL restricted flow from the UK to the Netherlands although the expectation is that flows will return to normal on the 16th September. In addition, gas flows from Norway have been significantly reduced as a result of planned maintenance with this issue expected to last until the end of the week. European commission president Ursula von der Leyen announced plans to improve liquidity in European gas markets through the development of a European LNG index, details of the plan have yet to be announced. The front of the curve came under sustained pressure with prices for an October delivery increasing by 42.95p to settle at 408.20p and Winter 2022 ending the day at 541.98p up 45.74p a therm.

GB baseload futures extended gains for the second session

GB baseload futures extended gains for the second session in a row as the market continued to track upward movement in the UK NBP gas market. An increase in spark spreads was also evident and this added to the upward movement.   The front month October contract added £34.95 to close at £378.60/MWh while Winter 2022 was up by £43.05 based on bid/offer spreads for the period. Prompt prices eased yesterday as wind generation levels improved during the session. The day ahead baseload power contract settled lower by £25.00 to close at £315.00/MWh

Crude oil markets recovered the losses from the previous session

Crude oil markets recovered the losses from the previous session with prices for November settling at $94.10, up $0.93 on the previous close. It was not all plain sailing as the market was unsure of direction and the spread between the high and the low came in $3.35.  There are a number of factors in the market providing direction at this time with US interest rate movements and supply/demand issues till impacting. The International Energy Agency (IEA) issued mute growth predictions for global oil demand, however news that the US was considering replenishing their strategic reserve provided some support.

NBP futures have opened higher this morning

NBP futures have opened higher this morning with October contracts trading up 20.41p so far.  Gains have been even higher for some of the remaining winter months with the Winter 2022 contract up 46.31p. Prompt prices however are subdued with the day ahead product shedding 44.05p on yesterday’s close. The UK system is currently oversupplied by 23.1MCM with demand running at 350 MCM. Brent Crude oil has opened flat this morning, last trading at $93.96 a barrel down 14 cent on yesterday’s close.  

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