Near NBP curve contracts shrugged off the latest EU sanctions package on Russia yesterday

Gas Market

The EU approved its 19th raft of sanctions on Russia yesterday which included an LNG ban. The GB gas markets failed to react as a number of LNG cargoes are expected before the end of the month which will bring the number of deliveries this month to 11 which is a couple more than last month. Temperatures for next week and early November have been revised higher too which added some downside to the front of the curve yesterday. November settled 1.70p down at 79.53p per therm with the remainder of the winter months falling by less than a penny on average. Natural gas for next summer was little moved day-on-day and closed at 75.64p.  Gas demand was increased yesterday to compensate for reduced wind generation in the power stack and this propped up the Spot price on the day which settled at 76.35p.  The rest of the prompt posted losses averaging just over a penny.

Power Market

Strong winds and elevated temperatures are expected in early November which weighed on the front month yesterday.  A similar decline was witnessed on the corresponding month on the NBP curve as November baseload fell to £80.55/MWh, posting a decline of £1.58/MWh. As on the NBP declines tapered off as the curve moved out and the Summer-26 contract was down £0.32/MWh at the close. Forecasts for wind generation to increase going into the weekend weighed on the day ahead product yesterday. Wind levels dropped to around 6.2GW but is expected to return to around 12.0GW on Thursday and increase higher for Friday. At the close, the Day ahead was £7.40/MWh down at £77.60/MWh.

Oil Market

Crude oil prices increased on Wednesday after the EU agreed secondary sanctions on Russian oil. The block agreed a ban on Russian LNG while also applying restrictions on movements of Russian diplomats through the EU zone.  There were expectations that the U.S. administration would follow suit after the U.S. President pulled out of the scheduled summit with Russia to be held in Hungary. Support also arrived from the weeks inventory report from the Energy Information Administration, which showed that U.S. crude oil and distillate reserves fell last week.  At the close of the session, Brent for December delivery as $1.27 up at $62.59 a barrel.

Markets this morning

Crude oil prices have opened with sharp gains and continued to rise this morning following the announcement of sanctions on Russia’s two largest oil companies by Donald Trump last night. Brent is trading close to the morning high of $65.80 a barrel as the U.S. President tries to force Putin back to ceasefire talks. The gains in crude oil have fed into the gas markets this morning with November adding 2.47p per therm while latest exchanges for December are going through at 84.60p, a gain of 2.33p on last nights close.  Prompt prices are likely to follow suit despite the GB gas system operating in equilibrium to a lower demand of 191mcm for today.