Baseload power market futures finished strong at the bell

The NBP futures curve recorded a second consecutive day of losses on Wednesday

The NBP futures curve recorded a second consecutive day of losses on Wednesday, but trading was choppy on the day.  Near months opened almost 15.00p lower but the early losses were pared back through the session.  By the close the March contract settled 3.97p lower at 166.92p while the front summer closed at 166.90p, down 2.06p.  Prompt prices finished higher yesterday despite demand being over 25% below the seasonal norm.  The spot closed at 164.05p, up 2.50p yesterday which was a penny below the close for the day ahead product.

 Wednesday proved to be a volatile day for the baseload power market

Wednesday proved to be a volatile day for the baseload power market with futures finishing strong at the bell.  March was the only near curve contract to retain some of the early losses, but this was marginal, and the contract closed at £160.75/MWh.  The remaining front months out to summer settled around £1.00/MWh higher yesterday. In contrast, the abundance of wind generation and forecasts for above normal temperatures pressured the day ahead baseload product yesterday. The contract settled at its lowest level since the start of the year and shed £35.65/MWh on the day.

Oil prices reflected the fact that tensions between Russia and the Ukraine had not gone away

Crude oil prices reflected the fact that tensions between Russia and the Ukraine had not gone away yesterday as prices rebounded on the day.  There was also support arriving from the latest inventory data from the E.I.A. which reported that U.S. crude oil reserves at Cushing Oklahoma, a key storage hub for the U.S., fell for the seventh week running.  Stocks at Cushing were down by 1.9 million barrels but overall, the U.S. inventories of crude were up by over 1 million barrels last week.  The EIA also reported that demand was a record 22.1 million barrels per day for the last four weeks.  News of progress in the negotiations between the U.S. and Iran came too late to weigh on the market and Brent closed $1.53 higher at $94.81 a barrel.

Crude oil prices fell after the close of market last night

News that the negotiations between the U.S. and Iran had neared an agreement came late yesterday and crude oil prices fell after the close of market last night. Both Brent and West Texas have continued to ease this morning with Brent down $1.88 a barrel on hopes that an end to the sanctions on Iran could see their crude oil production double to 4 million barrels per day within a few weeks.  Closer to home, natural gas futures have opened higher but latest trades have seen contracts ease off the morning highs with March last trading at 178.90p.  The GB gas system is forecast to run long today with demand for today slightly up on yesterday at 248MCM.

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