NBP futures settled higher again on Friday
The overriding upward sentiment in the UK gas market continued during Friday’s session, as fears over Europe’s winter energy supply continued to spur unprecedented levels of risk premium into the gas market. The front month contract September made gains of 49.65 pence per therm to settle at 640.36p. However the uptick was more evident further along the curve with Winter 22 settling at 827.08p up 52.10 pence on the day. NBP spot product also out turned higher on Friday amid Norwegian outages. However gains were curbed due to the return of UK domestic production, which has returned to 112MCM following summer maintenance.
GB baseload power futures also increased on Friday
GB baseload curve contracts tracked the NBP gas market to end the week on a high, as supply uncertainty continued to dominate the energy market. The front month September baseload contract settled at £570.00/MWh, up £48.00/MWh on the day while Winter 22 contract gained £59.75/MWh to settle at 855.25/MWh. The UK day ahead baseload contract follow future contracts, as low wind generation output supported the contract which settled at £615.65/MWh, up £60.27/MWh on the day.
Crude oil markets gained value on Friday
Brent crude prices settled higher on Friday, despite strong volatility, which saw the commodity rise and fall by $1 throughout the session. The bearish warnings from the head of the US Federal Reserve regarding the fight against inflation were curbed by signals from Saudi Arabia indicating an OPEC cut of oil production to offset the potential return of Iranian oil to the market. Iran is aiming to replace the absence of Russian oil in the European market, a positive sign for supply fundamentals as there has been no Iranian exports to Europe since November 2018. Brent crude front month October settled at $100.99 a barrel, up $1.65 while the WTI front month rose 54 cents to settle at $93.06 a barrel.
UK gas market closed due to Bank Holiday
Today being a UK Bank Holiday, there is no trading on the gas market. The UK gas market is currently 23MCM undersupplied with demand at 210MCM. Unseasonable low wind generation output is supporting power station demand which is forecast at 67MCM. Brent crude prices have gained value at the opening as the market focuses on OPEC’s plans to cut output. Brent crude front month is currently trading at $101.82 a barrel, up 83 cents.
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