Winter months declined by an average of 12.50p on Thursday
The winter months declined by an average of 12.50p on Thursday, reversing the gains from the previous session and some. The front month settled at 221.40p, its lowest close in ten days. NBP futures for summer-22 settled 4.04p down at 111.05p while contracts further out recorded marginal losses yesterday. A short gas system provided support to the prompt yesterday as demand was close to 230MCM although gains were pared back later in the session. The spot settled at 215.05p, up 7.00p on the day while the day ahead product added 6.00p to close at 214.05p.
Gains in carbon EUAs
A slump in coal prices added to weakness in gas futures yesterday as baseload power futures at the front of the curve shed £10.00/MWh. European coal futures were down by around 15% yesterday after the Chinese government is set intervene in the power crisis. Losses on the day were curbed by gains in carbon EUAs as contracts settled an average of 61 cent per tonne higher. Increases in demand along with higher prompt prices on the gas side propped up the day ahead baseload contract which settled at £173.00/MWh on Thursday. Wind generation is forecast to rise over the day with supply expected to exceed 11.0GW today.
Dollar strengthened on the day which provided some pressure to crude oil prices
Early gains in the crude oil markets were reversed through the session yesterday as some profit taking at the earlier highs encouraged a sell-off. Early forecasts are predicting a warmer than average winter for North America which could see demand forecasts being revised lower. On the currency side, the dollar strengthened on the day which also provided some pressure to crude oil prices. A stronger dollar will make commodities like crude oil more expensive to other currencies. At the close, Brent for December delivery was down $1.21 a barrel to close at $84.61 a barrel.
Gas futures market has opened a touch firmer the morning
The gas futures market has opened a touch firmer the morning, but contracts are trading near the lower end of this morning price range. November last traded at 224.00p and is up 2.60p on last night’s close but is 5.00p down from the morning high. As is typical on a Friday, the prompt is sluggish to get going but the GB gas system is in better shape today. Demand is forecast at 230MCM with supplies long by 9MCM, as LNG send out is increased to 34MCM. The UK is expecting up to 6 cargoes of LNG by mid-November. Brent has gained 40 cents a barrel this morning to last trade at $85.01 a barrel.