The UK gas market extended gains across the curve yesterday, as buying activity increased substantially in European markets since the news broke on Tuesday, of the extension to the maintenance at Norway’s Nyhamna gas processing plant from the 21st of June until the 15th of July. In contrast to Tuesday’s session, where the risk premium was factored into the front of the curve, the biggest gains were seen in the 2024 seasonal contracts, particularly the Winter 24 contract, which gained 9.42p on the day. The front month contract July 23 traded down as much as 5.72p at a low of 86.00p before flipping into positive territory, to settle up 3.79p on the day at 95.51p. On the prompt, the Within day contract opened lower, dipping to 85.00p before settling at 93.5p, up 2.50p on the day, while Day ahead was up 23.55p to settling at 96.05p.
Contracts across the GB baseload power curve pushed higher yesterday, with seasonal contracts for 2024 taking the brunt of the upward momentum, in line with the UK gas market. The Summer 24 contract gained £10.00/MWh to closed at £117.75/MWh, its highest price since early May. The gains were less significant at the front of the curve, with the July contract increasing by £5.00/MWh to close at £105.50/MWh. GB baseload for day ahead delivery closed at £97.18/MWh yesterday, up £12.18/MWh day on day. The EUA spot contract surpassed the €90 mark once again yesterday, gaining €3.14 to close at €91.91. The upward movement in the carbon market can be correlated with the increase in the energy fuel mix.
Oil markets drifted lower yesterday, giving up early gains, after the U.S. Federal Reserve projected more interest rate hikes this year, worrying markets about demand just hours after government data showed an unexpected, large build in U.S. crude oil stocks. U.S crude oil stocks rose by about 8 million barrels in the week ended June 9, a lot higher than the 500,000-barrel decline that was forecast. Both Brent and WTI front month contracts had climbed as much as 1.5% earlier in the session as they extended gains from yesterday on expectations of rising fuel demand after China’s central bank lowered rates. The August contract for Brent settled at $73.20 a barrel, down $1.09, while WTI settled at $68.27, down $1.15, at the close.
Markets this morning
The UK gas market has picked up where it left off yesterday, as prices push higher once again this morning. The front month contract July has broken the 100.00p price barrier, last trading at 107.09 pence per therm while Winter 23 last traded at 148.29p. The near term fundamental picture is unchanged from yesterday with the UK gas system well supplied and balanced this morning, with demand forecast at 142mcm. In the wider energy mix, EUA carbon and global oil markets have both opened in positive territory. The EUA Dec 23 contract last traded at €93.43 a tonne, while the Brent front month is trading at $73.29 a barrel.