European gas markets extended gains for the third day in a row since the announcement of the extension to the maintenance at Norway’s Nyhamna gas processing plant from the 21st of June until the 15th of July on Tuesday. With the tightening of gas supplies across the continent, many traders were stopping out of their short positions, which caused a squeeze and added to this short-term bull run. A volatile day of trading saw the front month July 23 contract traded as high as 125.30p in the morning session, retracing in the afternoon to close at 103.00p, up 7.49p on the day. The largest gains were seen in the bellwether Winter 23 contract which closed at 146.69p up 8.69p. On the prompt, the within day closed 9.28p up on the day at 103.58p while the day ahead closed 7.58p higher at 103.63p.
GB baseload futures settled higher for a second day as the market tracked movements on the NBP curve. The front month settled at £111.00/MWh, making a gain of £5.50/MWh on the day while the front season contract, winter-23 gained £6.60/MWh to close at £147.10/MWh. Carbon prices settled mixed yesterday with EUAs weaker at the close while the UKAs remained bullish. GB baseload for day ahead continued to edge higher on Thursday with forecasts for lower renewables providing support. Winter is expected to fall below the seasonal norm next week while solar photovoltaic output is also expected to be slightly lower.
Global oil markets rebounded higher as the dollar weakened and data showed a jump in refinery runs in world’s second largest crude oil importer China. The market saw support as above-forecast U.S. jobless claims weighed on the U.S dollar and data also showed China’s oil refinery throughput in May rising 15.4% from a year earlier, its second highest total on record. However, price gains were capped as China’s industrial output and retail sales growth in May missed forecasts and fears that higher interest rates would slow the U. S and European economies and reduce oil demand. The August contract for Brent settled at $75.67, up $2.47 a barrel, while WTI settled at $70.62, up $2.35 a barrel at the close.
Markets this morning
The UK gas markets have erased some of the gains recorded this week in early trading this morning. The front month contract July is currently trading down 15.70p at 87.30p near the low of the day, while Winter 23 last traded at 132.90p down 12.69p so far. The UK system has opened roughly balanced this morning as supply-demand fundamentals remain roughly stable with the weather forecast unchanged. In the wider energy mix, EUA carbon and global oil markets have both opened in negative territory. The EUA Dec 23 contract last traded at €91.55 a tonne, while the Brent front month is trading at $75.19 a barrel.