NBP futures moving higher in the opening hours of trading

04 July 2022

 Gas trading was light on Friday

Gas trading was light on Friday with the market seeming to pause for breath. Gains had been the order of the day in the last three session as prices firmed across the curve.  Buys on most forward contracts were hard to find although contract past the front did post some modest gains by settlement.  There was more activity on the new front month August contract which weakened over the course of the day.  At market settlement August was priced at 240.94p, down by 7.36p form the previous close.  Across the remainder of the curve gains averaged just over 3.00p per therm. Prompt prices firmed but remain at a considerable discount to the Dutch TTF market.

  The GB baseload prompt market turned weaker on Friday

The GB baseload prompt market turned weaker on Friday as wind generation levels were revised upwards for the weekend and early this week.  The day ahead contract fell to £171.00/MWh down by £19.35 while power for the weekend was priced at £171.50/MWh.  Wind generation is forecast just above 7GW for coming days. The weaker prompt pressured the front month which declined by £7.25 but other contracts posted gains on higher fuel costs.  these gains were somewhat capped by a decline in EUA carbon prices which fell by over €3.00 per tonne.

The market is quite conflicted at present

The September Brent crude contract assumed front month status as July settled for the final time on ICE.  Following three session of losses Brent crude for September delivery firmed as the contract added $2.60 during the session.  The market is quite conflicted at present with several factors competing to give direction.  The market continues to receive support from various industrial action events the latest of which is due to impact several key offshore Norwegian oil platforms.  There have been a number of other supply outages in Libya and Ecuador in particular.  The lack of progress in talks between the U.S. and Iran has also dimmed the prospects of more Iranian oil coming on the market.  

NBP futures have opened firmer

NBP futures have opened firmer with August moving sharply higher in the opening hours of trading this morning.  The front month for the NBP curve last traded at 267.00p which is 26.06p up on Fridays’ close.  The prompt has also started the week in bullish form with the spot and day ahead over 40.00p up on the previous settlement.  The markets continue to be supported by uncertainty around Russian gas flows and reduced LNG supplies from the U.S. since the explosion at the Freeport LNG facility on 08 June. The reopening of the plant has been deferred due to safety concerns. Brent for August delivery is 80 cents a barrel down at $110.83 a barrel with trading for the U.S. benchmark a touch muted today due to the July fourth holiday in the U.S.
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