Jerome Powell comments continue to weigh on the crude oil markets

Gas Market

The weakness in the gas market was challenged yesterday as the early losses were pared back over the morning and a late run up in prices left the near curve between 2.50p and 3.00p higher at settlement.  Near months peaked around 12.00 above Wednesday’s close with April hitting an intra-day high of 119.05p before settling at 109.59p, a move of 2.74 higher over the session.  The summer and winter contracts both added similar premiums on the day while gains to longer contracts were more modest with a few posting some losses. Prompt prices settled mixed, with the spot posting a decline of 5.00p while all other prompt contracts settled higher.  Strike action at France’s Total Energies may have added to supply concerns while the cold spell has boosted demand.

Power Market

The gains in the gas and carbon markets boosted GB baseload power futures on Thursday as near curve contracts settled an average of £6.85/MWh higher.  Clean spark spreads for April also added premium yesterday as Baseload for April settled £9.90/MWh higher at £125.65/MWh. On the prompt, the day head product settled almost £10.00/MWh lower.Carbon EUAs consolidated the previous session’s gains and added a further 1.2% on average yesterday. The spot price settled at €96.01, gaining €1.38 per tonne, while UKAs rose by £1.50 per tonne.

Oil Market

The recent comments from Jerome Powell continue to weigh on the crude oil markets as Brent slipped to a 12-day low yesterday.  The global benchmark for crude oil, Brent, fell by $1.07 a barrel on Thursday bringing the decline for the week to $4.59 a barrel.  The Chairman of the Federal Reserve was bullish in his address to the Central Banking Committee this week and is prepared to speed up interest rate hikes if necessary.  This hawkish view has cooled the crude oil markets and there is little data to counter the decline. China’s crude oil imports for the first two months of the year were down on last year’s figures but could rise to an average of 11.8m barrels per day for 2023.  In Europe, strikes at Total Energies have halted deliveries from refiners in France.

Markets this morning

The NBP futures market opened higher this morning with near months returning to the peaks hit yesterday.  April went even higher to 120.26p but those gains have not held up and April last traded at 115.20p, which is 5.61p up on yesterday’s close.  The summer contract was slow to trade but has just gone to through at 116.50p, a gain 4.29p this morning. Prompt prices look likely to open higher with only the day ahead seeing action so far and is 2.95p up.  GB gas demand is also forecast higher at 326MCM for today and supplies are lagging by 16MCM. Brent for May delivery is 39 cents down at $81.20 a barrel.  

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