EU leaders yet to agree on gas price cap

Speculation on currencies provided support to prompt and near curve gas prices

A short GB gas system along with speculation on currencies ahead of the resignation of the British Prime Minister provided support to prompt and near curve gas prices yesterday.  Curtailed imports from Norway due to maintenance works combined with a lower LNG send out yesterday as the supply side lagged demand by 10MCM at the close of play.  The supply picture remains healthy for the coming weeks, however, with UK LNG supplies expected to be topped up by 12 laden vessels over the next fortnight, while temperatures are to remain above the seasonal norm. At the close the November contract settled 41.29p up at 224.00p while on the prompt the spot and day ahead closed an average of 50.00p higher.  

Carbon EUAs eased on the day

GB baseload futures changed tack on Thursday with higher gas prices and speculation on the resignation of the British PM feeding in support.  The front month added £17.75 to close at £277.00/MWh while the summer contract for 2023 settled at £299.75/MWh up £27.30.  Carbon EUAs eased on the day with the spot price threatening the two-week low but falling a little short at €66.61 per tonne.

 Crude oil prices settled mixed on Thursday

Crude oil prices settled mixed on Thursday with Brent closing 3 cents a barrel down while the U.S. benchmark, West Texas Intermediate, added 43 cents a barrel.  Earlier in the session crude oil prices flipped between losses and gains as concerns over inflation vied with news that China is considering relaxing it’s Covid-19 policies for visitors. Prices rallied later on the back of reports showing the U.S. Strategic Petroleum Reserves were at four-decade lows.  The EIA report showed SPR stocks were down by 3 million barrels last week and earlier in the week President Biden announced the release of 15m barrels by the end of the year. This is the final batch of the 180m barrels of SPR he promised back in April.  

NBP futures market has opened softer this morning

The EU leaders talked about gas price cap late into the night and discussions ended without agreement.  In the gas markets, the NBP futures market has opened softer this morning with November last trading at 207.40p, down 16.60p.  The summer contract has traded and is down 25.58p at 342.00p.  The day ahead product traded early but has not traded since and is flat to yesterday’s close with no other contracts registering trades on the prompt screen.  The GB gas system is forecast to run slightly short for now, demand is pitched at 253MCM which is 12.1% below the seasonal norm.  The December contract for Brent is 82 cents down at $91.56 a barrel.  

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