Gas Market
The NBP gas market opened in negative territory on Tuesday morning, with the opening and subsequent trades all exchanging hands below Monday’s close. The front month April, opened at 102.00 pence per therm before falling lower to 101.00p. The driving force behind the initial fall was increased wind powered electricity generation, and a forecast for improving temperatures. Both events have the same impact of reducing gas demand. However, a strike at an LNG regasification facility in Dunkirk France threatened LNG send out for Northwest Europe that helped the gas market retrace its early losses and strengthen during trading in the afternoon. Coupled with this was emerging news the EU countries agreed to seek a legal option to halt the importing of LNG from Russian companies by preventing them from booking capacity at LNG terminals.
Power Market
The UK baseload day ahead contract fell on Tuesday amid rising temperature forecasts for the rest of the week. Curve contract all followed movements on the NBP gas hub and rose in the afternoon to finish the day in positive territory. Summer -23 rose by £1.50 /MWh from the previous day’s closing/ Also impacting the baseload contracts was the continued strength on the carbon markets.The carbon market received a boost as a result of the European Commission’s statement indicating lower-than-anticipated extra EUA sales in 2023, leading to a rise in prices. In addition, the strengthening of energy prices provided added support to the carbon markets.
Oil Market
On Tuesday, crude prices saw a slight increase, building on significant gains from the prior session due to concerns about supply disruptions in Iraqi Kurdistan and optimism that the banking crisis is under control. Following an arbitration ruling affirming the need for Baghdad’s approval to export oil, Iraq was forced to halt exports of approximately 450,000 barrels per day from its northern Kurdistan region through Turkey, causing prices to surge over $3 on Monday. Furthermore, oil prices are anticipated to receive ongoing support from indications of a rebound in demand in China. According to a forecast by a research division of China National Petroleum Corp on Monday, China’s crude oil imports are predicted to increase by 6.2% in 2023 to reach 540 million tonnes annually.
Markets this morning
Gas prices continued their upward trend this morning. Most traded contracts opened in line with, or just above yesterdays close before strengthening further in early trading. Near curve prices have softened slightly at the time of writing, but are still trading higher than yesterday, with the front month last exchanging hands at 107.43p per therm. Oil markets are holding firm following an American Petroleum Institute report indicating that US stocks have fallen for the week ending 24th of March. The front month Brent Crude Oil contract is currently trading at a premium of 30 cents to last nights close. Carbon is again strong this morning, while UK baseload power markets are down slightly on yesterday’s close.
29 March 2023
