UK Gas & Electricity Markets
Last week saw further volatility as scheduled maintenance on the Nord Stream 1 pipeline began and reduce Norwegian flows due to unscheduled maintenance.
Lower flows from Norway and Russia due to maintenance and unplanned disruptions lent support to the British NBP spot gas price which rose on Tuesday by 14.2% to 8.4p/kWh. The closure of a significant Norwegian gas production facility boosted the gas price for Q4 22 delivery by 4.8% to 14.6p/kWh.
The NBP spot gas price spiked by 12.8% to 9.4p/kWh on Wednesday as Canada had not officially informed Gazprom about the return of the turbine required to pump gas through the Nord Stream 1 pipeline to ensure stable gas flows to Europe. Gas and power markets sold off heavily on Friday’s session as the sellers came back into the market. There was no obvious reason for the fall on Friday apart from traders potentially de-risking positions prior to the weekend and previous profit taking.
The market will look to this Wednesday (21st July) as the scheduled annual maintenance on the Nord Stream 1 is due to end.
Other Energy Markets
Crude oil fell on Tuesday to trade below $100 per barrel due to a strengthening dollar, COVID-19 restrictions in China, the world’s largest petroleum importer, and growing concerns about a recession in the global economy.
Oil prices fell on Thursday as investors are concentrated on the possibility of a significant rate hike in the United States later this month, which may reduce inflation but also dampen oil demand. Thus, Brent and WTI crude ended both 0.5% lower at $99.10 and $95.78 a barrel respectively. However, on Friday Oil increased back above $100/barrel on expectations that there will be no increase in Saudi oil production.
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