Prompt prices eased on Wednesday

Near gas futures on the NBP eased for a second day

Near gas futures on the NBP eased for a second day yesterday, however futures past the front season settled slightly up.  The front month had opened around 7.00p lower and prices start to firm during the session for a brief spell but the losses on the winter months extended to the close.  The front month settled at 181.11 down 5.00p, while the full winter contract fell by 4.79p.  Prompt prices also eased on Wednesday as the gas system ran with a comfortable surplus throughout the session and with the promise of increased wind generation gas demand should not increase for the remainder of the week.  

The October contract for baseload power was climbing

The October contract for baseload power was climbing in the afternoon session yesterday which was at odds with the gas counterpart on the NBP.  The contract was up over £2.00/MWh but later settled just £1.25/MWh higher on the day.  There was some support from Carbon prices which gained around 40 cent on Wednesday as contracts settled between €60.49 and €61.54 per tonne. Wind generation picked up yesterday and is expected to increase further today which saw the baseload for the day ahead product ease marginally to £156.00/MWh.  Wind is forecast to meet over 40% of GB power demand today while gas generation should contribute around 30% to the stack.

 Brent crude closed at its highest level

Brent crude closed at its highest level since the end of July on Wednesday gaining $1.83 a barrel on the day.  The U.S. benchmark, West Texas Intermediate also made a significant move on the day adding $1.74 a barrel, as crude oil reserves in the States fell to the lowest level in three years.  The Energy Information Administration reported that U.S. crude stocks decreased by 3.5 million barrels last week to 414 million barrels, the lowest level since October 2018.  Activity in Gulf of Mexico has been ramping up after recent hurricanes shut in some facilities while demand is also recovering worldwide.  

The forward curve is on the slide

Prompt prices have yet to get off the mark this morning, but the forward curve is on the slide.  Near months are between 7.00p and 9.00p lower in early trades although latest exchanges have seen the front move off it’s low for the day and last traded at 174.10p.  Carbon EUAs out to 2023 are almost a euro lower this morning with the Dec-22 contract last going through at €59.99 per tonne.  The crude oil markets are still digesting yesterday’s report from the EIA and prices have been fairly flat so far.