GB power futures saw further gains on Friday

The UK gas system maintained a positive supply-demand balance

The UK gas system maintained a positive supply-demand balance throughout the trading day on Friday. The ongoing maintenance programmes on the Norwegian supply system are scheduled to begin winding up next week, improving the short-term supply outlook. Day ahead gas for today shed 1.95p while the week ahead contract for this week was down by 2.00p. Uncertainty over Russian supplies and LNG availability heading into the winter months continues however and near futures contracts pushed higher again with gains of over 3.00p on Friday. Prices for the mid-winter months topped 150.00p per therm for the first time.

 The GB prompt power market volatility continued

The GB prompt power market volatility continued with day ahead baseload power falling by over £20.00 but remaining elevated at £205.00/MWh. The day ahead index for the month so far now stands at £171.66/MWh. The power market volatility is exceeding that of the gas market due to the tight supply margins currently prevailing. GB power futures saw further gains on Friday with week-on-week gains of over 10%, matching the rise in GB gas prices. The Winter 21 contract hit a new high, gaining £2.15 to settle at £140.25/MWh. Gains might have been even greater but for a drop of almost €2.00 per tonne in emissions prices.

 Crude oil rebounded on Friday

Crude oil rebounded on Friday with Brent gaining $1.47 to keep the global benchmark in the tight range around $72.50 where it has traded for the past 2 weeks. Friday’s settlement price of $72.92 left Brent crude just 31 cents higher week-on-week. China’s decision to auction some of its strategic oil reserves caused prices to ease on Thursday but the market took this as an opportunity to buy on a dip, pushing prices higher on Friday. With 75% of Gulf of Mexico production still offline on Friday, the U.S. benchmark, West Texas Intermediate, gained $1.58 a barrel on the day. Carbon prices fell by almost €2.00 per tonne on Friday and were down 80 cent week-on-week.

The natural gas markets have firmed on opening

The natural gas markets have firmed on opening this morning with near NBP futures around 5.00p higher while the spot has added 8.80p to last trade at 148.90p. The front month, October, is up 4.73p to 150.25p while the winter contract has gained 5.36p at 154.10p. The GB gas system is forecast to run short this morning despite improved Norwegian nominations of 85MCM for today. In the crude markets, both Brent and West Texas have gained around 50 cents a barrel with the November contract for Brent last exchanging at $73.45 a barrel.