The opening gains to NBP futures were held through the session on Friday
The opening gains to NBP futures were held through the session on Friday while the prompt reversed the increases and settled lower. The National Grid proposed to increase exports through the Balgzand Bacton interconnector by 25% to assist Europe in reaching their storage targets by November while Germany raised its storage target to 95% for storage reserves which is above the EU’s target of 80%. The August contract for the NBP settled 16.05p higher at 312.18p while the winter contract settled 7.74p up but over the week was 2.49p down. The GB gas system ran with a deficit on Friday as demand was increased to over 220MCM, but the spot and day ahead settled 28.05p and 27.55p lower respectively.
Baseload futures tracked the NBP curve higher on Friday
Forecasts for wind generation to rise above 10.5GW for Monday pressured the baseload contract for the day a head on Friday. Generation from wind turbines had only averaged around 5.8GW for the past week and the day ahead contract shed £61.28/MWh on Friday. Carbon EUAs continued to weaken with the spot down a further €1.96 per tonne. Baseload futures tracked the NBP curve higher on Friday with August adding £5.70/MWh while the front winter contract settled at £460.00 up £7.50/MWh. UK Clean spark spreads for the winter gained £2.40/MWh on the day but over the week were £34.16/MWh higher.
A volatile session ended on Friday with Brent Crude shedding roughly a dollar a barrel
A volatile session ended on Friday with Brent Crude shedding roughly a dollar a barrel across the near curve. Contracts for delivery for the front month of September were down $0.66 to finish at $103.20. The US Federal Reserve is expected to increase interest rates this week for the second time in 2 months. A rise of lower than 75bp will be viewed as more bullish for global economic growth and could provide a boost to crude prices. Data from the EIA shows US gasoline demand has dropped 8% compared to the same period last year when the pandemic was still curbing travel. Prices at the pumps have also fallen marginally in recent weeks, but the outlook for demand remains bearish.
There’s been some yo-yoing in prices with trading on the front month
There’s been some yo-yoing in prices with trading on the front month of the NBP curve this morning. August is currently 8.18p down on Friday’s close but earlier it was almost 5.00p up as it traded to 317.00p. Contracts past the front month have not traded yet and there has not been much activity on the prompt either. The spot has traded and is 1.05p lower at 253.00p. The GB gas system is 5MCM long against forecast demand for today of 200MCM. Brent is almost a dollar a barrel higher at $104.11 a barrel with news that Libya to increase output in the next two weeks.