Gas contracts opened weaker and risk premium exited positions on Friday

The gas market extended losses for the second session in a row

The gas market extended losses for the second session in a row and contracts opened weaker and risk premium exited positions over the course of the session. The November contract assumed front month status on Friday and was under immediate pressure with the price declining by 63.91p to close at 342.00p/them. Winter 2022 settled for the final time on the Spectron platform and was marked down by 41.00p at 441.53p/therm.  This contract trading to an all-time high of 827.08p/therm on the 26th of August but has declined by over 385.00p since then. The prompt market was also under pressure on Friday with the day ahead market declining by 50.45p to settle at 180.05p/therm and at a 65.00p discount to the final October price.  

GB baseload power market extended losses for the second session

The GB baseload power market extended losses for the second session in a row on Friday with premium comping out of all contracts. The majority of the losses were gas led although spark spreads for the Winter also eased.  The market welcomed the imminent return of both the Heysham 2 and Hartlepool nuclear reactors which are scheduled to come back online in the 4th and 7th October. The October baseload power contract settled for the final time at £245.50/MWh, down by £24.50. The full Winter 2022 contract also settled for the final time at £580.00/MWh, down by £32.50.  

 Crude oil market remained relatively steady throughout Friday

The Crude oil market remained relatively steady throughout Friday as prices stayed relatively close to the previous settlement.  The Brent crude contract for November delivery traded in a narrow range of just over a dollar as the market weighed the possibility that the OPEC plus group would move to further reduce production.  The next meeting of the group is due to take place on the 5th of October and it is rumoured that Russia is urging the group to reduce production by 1 million barrels a day in order to shore up the price.  The stronger dollar is acting as a counterweight to supply concerns as the commodity usually weakens when the dollar is strong.  Brent crude settled on Friday at $87.96 a barrel, down by $0.53.

 Both the November and December NBP gas contracts remain under considerable pressure

Both the November and December NBP gas contracts remain under considerable pressure this morning and for the third session in a row prices are on the move lower. In early trading the new front month November contract has shed 22.20p and is changing hands at 330.69p/therm. The December contract is also being actively traded and latest trades to go through are priced at 473.31p, down by 25.00p form Friday’s close. The spot gas market is yet to post a trade but day ahead gas in trending slightly lower and is priced at 178.00p/therm. Gas demand is forecast at 271MCM for today and the system has a deficit of 7MCM at this early stage.

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