Early indications point to a fall in gas prices

Both the prompt and futures ramped up

Early indications pointed to a fall in gas prices on the NBP yesterday as the gas system ran with a healthy surplus and forecasts for increased wind generation expected to reduce gas demand. But prices switched tack and both the prompt and futures ramped up with near futures contracts gaining around 3.00p on Wednesday’s close.  However, the increase in wind generation which came late in the session prompted a sell-off on spot and day ahead contracts which ended the session over 3.00p down.  The sell-off on the prompt weighed on near months and almost all the day’s gains were pared back by the close.  The September and October contracts were the only futures to close lower and settled down by 0.69p and 0.12p respectively.

 GB Baseload power futures saw mixed action yesterday

GB Baseload power futures saw mixed action yesterday as prices swayed between gains and losses as the market tracked movement on the NBP futures market quite closely.  The outcome was similar with a late sell-off eroding most of the day’s gains while only the front month closed lower at £109.85/MWh. Carbon EUAs declined by 3.5% yesterday as contract shed over €2.00 per tonne.  Wind generation was forecast to pick up yesterday and by market close was contributing 9.0GW of supply to the stack.  Baseload for the day ahead declined by over £3.70/MWh on the day as wind and solar generation should top 13.0GW today, over 40% of demand.

Crude oil markets struggled to find direction on Thursday

The crude oil markets struggled to find direction on Thursday and after a session of choppy trading both benchmarks were marked marginally lower. It’s understandable that traders were unsure whether to fix or let go positions when there so many different views in the market.  The International Energy Agency, based in Paris, have revised their demand projections lower for the back half of 2021 citing the rise in the Delta variant of the coronavirus as the main reason.  OPEC in their monthly report said they expect their projections on global oil demand to remain unchanged for the rest of the year, while the EIA earlier in the week expected U.S. oil demand to rise for the remainder of 2021.

Both the prompt and futures market have opened lower

Both the prompt and futures market have opened lower this morning but early declines to the September contract on the NBP have been clawed back in recent trades.  The front month traded to a low of 110.74p but last traded at 112.82p, that’s almost a penny down on last night’s close.  There is not much activity on contracts further out, but the winter contract has also declined by a penny.  Trading on the prompt is also thin, but the spot is marginally down at 108.45p.  Gas demand is 142MCM for today and supplies are long by 18MCM while reinjecting is expected to continue at gas storage facilities.  Brent is 6 cents a barrel down currently and has not traded above last night’s close so far today.