The UK gas market pushed higher yesterday
The UK gas market pushed higher yesterday, extending the gains made on the previous session, but yet again it was a day marked by a lack of direction. Contracts for the front month of November traded as high as 310.00p and as low as 280.00, a spread of 30.00p before finally settling at 286.20p per therm, a modest rise of 2.86p. Further out on the curve spreads were less significant but the overall gains were slightly greater, with Summer 2023 positing a gain of 6.50p to end the day at 398.00p a therm. LNG deliveries for 2022 continue to far outpace those for 2021, with 7 cargoes already delivered for October 2022 compared with 8 cargoes for the month of October 2021. The trend is set to continue with another 11 cargoes due at UK facilities by October 29th.
GB baseload prompt continued on a downward trajectory on Tuesday
The GB baseload prompt continued on a downward trajectory on Tuesday as further premium came out of contracts. Wind generation continues to ramp up and output is expected to average 9.7GW for the remainder of this week. The Day ahead baseload power product settled at £190.00/MWh, down by £13.70 from the previous session. Power prompt weakness fed into the front of the curve where both the November and December contracts declined by £34.754 and £33.15, respectively. Upward price pressure continued on Q1 2023 as this contract settled at £755.00/MWh, up by £24.75 from the previous close.
Crude oil markets extended the losses of the previous session on Tuesday
Crude oil markets extended the losses of the previous session on Tuesday, shedding a further 2% for 2023 and 2024. The recent surge in Chinese covid-19 cases has once again raised concerns for global demand as the world’s second largest economy adheres to the “zero covid policy” and numerous manufacturing-based cities remain under various degrees of lockdown. Fears of a worldwide recession continue to mount with the European Central Bank and US Federal Reserve widely expected to raise interests yet again on October 27th and November 2nd respectively. Brent crude for a December delivery fell $1.90 to settle at $94.29 a barrel.
NBP gas contracts have opened fractionally higher this morning
NBP gas contracts have opened fractionally higher this morning, with the front month of November last trading at 290p a therm a rise of 3.80p. Liquidity remains limited however and seasonal contracts have yet to trade. The UK system has opened comfortably oversupplied by 9.2 MCM with a predicted demand of 359.80 MCM. The market impact of the comfortably supplied system is not yet clear as the spot product has yet to trade and the last trade on the day ahead was at 180.00p per therm a gain of 11.95p. Brent crude prices have opened stable on yesterday’s close with the latest traded price of $94.28, a mere cent above the closing price.