Crude oil prices slipped for a third day yesterday with U.S. demand concerns weighing

23 May 2024

Gas Market

Planned maintenance continued at Troll and Kollsnes yesterday which kept prompt and the near curve buoyed through the session. Nominations through the Langeled line picked up later in the day giving hope that full capacity would be available following the planned maintenance works however the prompt and near curve retained the early premium.  European gas futures also received support from reports of a possible cut in Russian gas supplies to Austria following a court decision. The NBP prompt settled an average of 3.00p higher with the Day ahead settling at 81.14p per therm.  On the curve, the front month added 2.91p to close at 82.46p while the Winter settled 2.75p higher at 103.06p.  

Power Market

Wind generation is forecast to rise above 12.0GW on Thursday and pressured the Day ahead product which settled £11.55/MWh down yesterday.  Baseload futures responded to the gains on the NBP curve as the front month added £2.45/MWh to settle at £75.25/MWh.  It was the sixth day of gains in succession for the June contract as the market has reacted to the volatile gas and carbon markets. After returning to four-month highs this week, Carbon EUA contracts out to 2026 increased by less than 1.0% yesterday while the Spot settled 17 cent down at €74.30 per tonne. UKAs added 24 pence per tonne to contracts for 2024 and 2025.  

Oil Market

Crude oil prices slipped for a third day yesterday with U.S. demand concerns weighing.  The Energy information Administration confirmed a build in U.S. crude oil stocks over the last week when the market had expected reserves to fall. Stocks grew by 1.8m barrels in the week to 17-May which was well above the estimate of a 2.5m barrel draw down by the industry group, American Petroleum Institute.  There is still much speculation as to when the Fed will cut interest rates, with latest estimates pointing to September itis hoped this will ignite crude oil demand. OPEC+ are scheduled to meet on 01-June and are likely to maintain the existing cuts in production given the current weakness in prices. Brent for July delivery settled at $81.90 a barrel, down 98 cents.  

Markets this morning

A short gas system with supply niggles after the planned maintenance works has given support to the prompt and near curve this morning. Gassco, the Norwegian gas operator has reported unplanned outages at the Troll field and at Kollsnes due to a delayed start up and processor issues.  The June contract traded to a high of 87.71p but the last trade for the front month was a little lower at 86.85p. The strong opening gains have rippled through the near curve with the Winter contract trading 2.68p higher at 105.74p.  In the crude oil markets, the July contract for Brent has recovered 32 cents a barrel to last exchange at $82.22 a barrel.