Crude oil prices received a boost on Monday

Gas Market

The GB gas markets opened firmer on Monday with a forecasted cold spell boosting heating demand in the early morning, but gains were partially reversed over the session amid conflicting forecasts.  Prompt prices were just a touch higher at the close, as the GB gas system gained some equilibrium having had an early deficit of around 8MCM.  Trading for NBP futures focused on the front month and season as both contracts expire on Thursday on the ICE platform.  April settled at 104.75p, up 4.04p while the summer contract added 2.45p to close at 107.28p.  We could see more support for these contracts over the coming days as positions are closed out.

Power Market

There minor gains recorded in GB baseload futures too yesterday as the market reacted to movement in the NBP gas and carbon markets. Trading concentrated on the front month and April settled £2.25/MWh up at £109.00/MWh.  The summer contract settled at £115.25 and was just £1.40/MWh higher at the close. Forecasts for wind generation is to decrease for back half of the week but still remain around the seasonal norm but on Tuesday it should still exceed 12.0GW.  As a result, baseload for the day ahead eased yesterday, settling £6.90/MWh lower.

Oil Market

Crude oil prices received a boost on Monday with news that Turkey had halted crude oil supplies from Kurdistan over the weekend.  Oil supplies bound for the Turkish port of Ceyhan were arrested at the weekend following a disagreement between Iraq and the Turkish government. The pipeline’s capacity is 450,000 barrels per day and the port is a key gateway to the East.  There was some easing of concerns in the banking sector yesterday and this added to the upside on the day which led the May contract for Brent to add $3.13 a barrel to close at $78.12 a barrel.  WTI settled 5.1% up at $72.81 a barrel.

Markets this morning

Gas demand is over 40MCM down on Monday and supplies are running with a healthy surplus this morning.  While very little has trading on the prompt screen, the day ahead product has reacted to the system’s comfort and is down 4.75p on yesterday’s close.  Near months for the NBP curve have opened lower by around 2.00p and April last traded at 102.26p.  The seasonal and longer curve contracts have yet to trade but the bid/ask spreads are below yesterday’s close.  Brent has traded both ways this morning, but latest exchanges are 49 cents higher at $78.61 a barrel.  

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