Bullish gains in gas, carbon and the crude oil markets on Monday

04 April 2023

Gas Market

A surge in crude oil prices added to support for gas prices on Monday as the front month contract for Brent rose by over $5.00 a barrel.  GB gas demand increased as wind fell below recent averages and exports through the BBL interconnector increased while the TTF prompt remains at a premium to the NBP.  The spot for the NBP settled at 125.05p, up 10.55p while the day ahead added 10.30p to close at 127.05 yesterday.  NBP futures opened lower, but losses were reversed early on and gains were extended through the volatile session.  At the close, May the new front month settled 10.24p higher at 128.27p while the winter contract added 13.46p to close at 165.28p.  

Power Market

The GB power markets were urged higher by bullish gains in gas, carbon and the crude oil markets on Monday.  Mat, the front month added £8.75/MWh to close at £125.50/MWh while the winter contract settled at £175.75/MWh, up £14.50/MWh.  Carbon EUAS made strong gains on the day with the Dec-23 contract closing at €95.65 up €3.90 per tonne. Wind generation fell below recent averages on Monday and is to fall further today, with forecasts around 5.0GW.  There was an unplanned outage at Hartlepool’s nuclear reactor on the day too.  Baseload for the day ahead closed £7.19/MWh higher as a result to settle at £122.19/MWh.  

 Oil Market

Crude oil prices surged from the off on Monday following the surprise announcement from OPEC on Sunday.  The new front month contract for Brent, June, traded up to $86.44 a barrel before settling at $84.93 a barrel, gaining $5.04 a barrel day on day.  It is the largest one-day gain for the global benchmark in 11-months.  The group announced cuts of $1.16m barrels per day with pledges from the members to reduce production.  Saudi Arabia is to cut 500,000 bpd, which is largest commitment within the group.  In the announcement the Saudi representative said these voluntary cuts are a measure to try bringing stability to the market.  

Markets this morning

The markets are a touch calmer this morning with some of yesterday’s gains on the NBP curve being eroded in early trades.  The front month, May, last traded at 122.00p, down 6.27p from yesterday’s close.  There’s also been early activity on seasonal contracts with winter down 7.78p to 157.50p.  Carbon EUAs have continued to rally with the Dec-23 contract up a further €1.25 per tonne in early exchanges.  The heat has been turned down in the crude oil markets with Brent just 22 cents a barrel up having gained over $5.00 a barrel yesterday.  
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