Gas futures surged higher on Monday
Reversing the direction of the previous 3 days, gas futures surged higher on Monday as news that total UK demand was expected to increase by 10% to 272.00MCM due to reduced wind power generation. Further impetus to the increases came as gas imports via the Langeled pipeline were reduced, with total offline Norwegian capacity reaching around 48.90MCM . Contracts for the front month of December traded as high as 286.47p before settling at 272.88p a therm, up 44.45 on the day. Likewise, the Q1 23 contract settle up 36.88p at 315.56p per therm. On the prompt, within day contracts retreated marginally to close at 96.05p a therm a fall of 6.00p. The day ahead also slipped slightly, shedding 3.00p to settle at 97.05p a therm.
Carbon prices moved lower
There was mixed sentiment in Tuesday’s session as GB baseload power futures for Q1 23 fell as contracts for December and next summer settled higher. Contracts for the front month of December closed £30.75/MWh higher at £283.50/MWh while contracts for Q1 23 continued to decline posting a drop of £5.75/MWh to end the day at £383.00/MWh. Carbon prices moved lower with December 2022 EUA’s shedding 74 cent to settle at €75.03 a tonne. Wind generation forecasts have been revised downward by 2.30GW to 8.50GW a day for the remainder of the week, however the day ahead baseload contracts fell £31.00/MWh to £107.00/MWh.
Crude oil pushed lower yesterday
Crude oil pushed lower yesterday releasing some of the premium added over the previous two sessions. A surge in covid-19 cases reported in China over the weekend dented the demand outlook in the world’s top crude oil importing nation. OPEC has cut its forecast for global oil demand growth by 100,000 barrels a day for both 2022 and 2023, citing mounting economic challenges including record high inflation and rising interest rates. Brent crude contracts for the front month of January slipped $2.85 to settle at $93.14 a barrel. West Texas Intermediate, (WTI) came under a similar pressure with contracts for a January delivery shedding $XX to settle at $XX a barrel.
The UK system has opened marginally under supplied
The UK gas market has opened mirroring the sentiment from yesterday with additional gains in early trading this morning. NBP contracts for the front month of December opened up at 300.00p and have added premium with the last trade at 309.38p a therm, a gain of 36.50p. Likewise, the Q1 23 contract has opened strong at 343.00p with the last trade at 344.41p a therm a rise of 28.81p and the Summer 2023 contract last trading at 304.00p a rise of 26.72p. As of yet many contracts yet to trade. The UK system has opened marginally under supplied at 353.80MCM. Brent crude oil has opened weaker again this morning with contracts for a January delivery last trading at $92.37 a barrel, down $0.77.