Closing Prices 08.07.2022
UK Gas & Electricity Markets
The price of NBP spot gas spiked by 15.7% to 9p/kWh on Tuesday as a strike in Norway led to restricted shipments to Europe. The gas contract for Sum2023 rose by 2% to 8.9p/kWh due to fears of tight supply in the face of declining flows before the upcoming winter. On Wednesday the NBP spot gas price fell sharply by around 34% to 6p/kWh as the Norwegian strike ended and gas flows rebounded.
On Thursday, the price of NBP spot gas increased to 7.6p/kW as LNG imports in Europe remain constrained. The gas price for delivery in Sum2023 surged by around 9% to 10.6p/kWh amid the announcement that gas storage filling target will not be possible without Nord Stream 1 flows.
Markets did settle on Friday as rumours began to grow that Canada would return turbines required to get the Nord Stream 1 pipeline back up to 100% flows. Markets for gas delivery in August 2022 fell 23% on Friday, winter 2022 also fell 7%.
Whilst prices at current levels will see demand reduce further, volatility is expected as liquidity in the market remains poor. There is value on contracts further out on the curve as summarised below.
Other energy markets
On Tuesday, oil prices saw their biggest daily drop since March, as lockdowns in China and mounting concerns about a world recession reduced demand. Brent crude fell by 9.5% to settle at $102.77 a barrel, while WTI crude dropped by 9.9% to $99.5 a barrel. Oil prices dropped to a 12-week low on Wednesday amid increased fears that energy demand might be impacted by a probable global economic recession.
Please contact hello@gleg.co.uk for a more detailed market analysis and expert view on how to navigate your energy procurement strategy through the current market volatility.