Brent closed at a new seven year high

There was a late tick up in near NBP futures on Thursday

There was a late tick up in near NBP futures on Thursday which left contracts out to next winter 9.00p higher on average.  Earlier, gas futures had reversed opening gains but then started to creep higher through the session as reports of lower gas flows from Russia to Germany materialised. Revised weather forecasts for the mid to end of February are now showing temperatures should be closer to the norm, which is lower than earlier forecasts.  With gas demand expected to increase, prompt prices for next week and the balance of month rose by over 10.00p while the spot and day ahead settled 7.35p higher yesterday.

 Baseload power futures market edged higher for a second day

Wednesday’s gains were consolidated yesterday as the baseload power futures market edged higher for a second day.  The increases in gas along with bullish carbon prices added to the upside as contracts out to next winter settled an average of £5.75/MWh higher.  The front month gained the least on the day moving just settled £1.55/MWh up. High wind generation and comfortable supply margins continued to weigh on the day ahead product yesterday which settled £7.70/MWh down.  Carbon EUAs added 32 cent per tonne as the spot closed at €94.04 per tonne on Thursday.

 West Texas Intermediate settled above $90 a barrel

A late rally in crude oil prices on Thursday left Brent close at $91.11 a barrel, a new seven year high.  West Texas Intermediate settled above $90 a barrel marker for the first time since October 2014, , adding $2.01 to close at $90.27 a barrel. A frigid air front is moving south through the U.S. and there are concerns the cold airmass could reach Texas, and if it impacted power generation like last year could disrupt oil production in the state. OPEC+ agreed to continued increasing production by 400,000 barrels per month although analysts have reported the group are not reaching existing targets already and so this news did little to pressure prices yesterday.

West Texas Intermediate has also added over a dollar a barrel in early trading

Yesterday’s late rally in crude oil prices has continued through early morning markets in Asia and Europe with latest trade for Brent going through at $92.36 a barrel.  West Texas Intermediate has also added over a dollar a barrel in early trading to last exchange at $91.60 a barrel.  Closer to home, NBP natural gas futures are around 5.00p higher with the latest price for the March contract at 198.25p.  Wide bid and ask spreads are stalling activity on the prompt this morning.  The GB gas system is finely balanced with demand for today forecast at 298MCM.  

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