Prompt prices settled lower on Friday
It was the final day of trading for the February contract on ICE on Friday and while trading was volatile during the session near NBP futures settled with little change on the day. February expired at 219.42p which was down just 0.54p on Friday but over the week it moved 30.10p higher. The conflict between Russia and Ukraine dominated the market for the week with risk premium being added to contracts further along the curve as the summer and winter contracts closed around 47.50p higher for the week. Prompt prices settled lower on Friday with the promise of milder weather and high wind generation weighing on prices.
Baseload for the day ahead eased on Friday
Forecasts for milder temperatures weighed on the February contract on Friday while the rest of the baseload curve settled higher after a turbulent session. Over the week the tensions between Russia and Ukraine provided support to the futures market with near contracts gaining an average of £30.00/MWh over the week. Baseload for the day ahead eased on Friday as forecasts for wind generation for the week remain high. Monday’s levels are expected to rise above 13.0GW and as a result the day ahead contract eased by £10.42/MWh on Friday.
Brent hit a fresh seven-year high on Friday
Brent hit a fresh seven-year high on Friday and settled at $90.03 a barrel as the geopolitical concerns continued to drive prices higher. The front month contract for Brent hasn’t settled above the $90 a barrel mark since 10-Oct-2014 and Friday’s gain notched up a sixth consecutive week of gains as the global benchmark moved $2.14 a barrel higher over the week. OPEC+ have committed to increasing output on a monthly basis, however, many members of the group are struggling to reach monthly quotas and with demand increasing following the most recent wave of the coronavirus supply will continue to be tight. West Texas Intermediate settled at $86.82 a barrel on Friday, up 21 cents.
Brent has continued to move higher this morning
The GB gas system is forecast 6MCM short against today’s demand of 281MCM. The issue with Norwegian gas flows through Langeled appears to have been sorted as the pipeline is nominated to run at full capacity today. LNG send out is down today with just 63MCM nominated from Milford Haven and the Isle of Grain terminals. The NBP prompt market has not traded yet but prices should open softer going on the bid/ offer spreads on the spot. March has taken up front month status on the futures board and is down almost 10.00p in early exchanges. Brent has continued to move higher this morning, last trading at $90.86 a barrel.