Intraday volatility was also much less severe than of late
The UK gas market has been relatively stable in the last number of sessions with prices not moving too far from previous settlements. Intraday volatility was also much less severe than of late as most NBP contracts slipped between gains and losses over the day. Save for the front month November contract the spread between the high and low was contained to less than 10.00p. The November contract fell to a low of 280.00p before climbing to 296.25p and settling at 293.90p, up by 7.70p on the day. Summer 2023 moved in the opposite direction as the front season settled lower by 11.84p, at 386.16p per therm.
GB baseload power market had a mixed session yesterday
The GB baseload power market had a mixed session yesterday as near-term contracts shed some premium while January and Q1 2023 added significant premium. January 2023 baseload is now priced at £909.50/MWh while Q1 2023 added £45.25 to close at £800.25/MWh. This period is one of the targets of the UK energy prices cap and it remains to be seen if these prices can be sustained to the point of delivery. Power contracts for Q2 2023 and beyond all went lower despite increases in the UKA carbon market and relatively stable spark spreads for these periods. The day ahead contract ticked up on a forecast for lower wind generation.
Crude oil markets extended losses for the third session in a row
Crude oil markets extended losses for the third session in a row are demand destruction worries continued to provide the strongest direction. The market remains concerned that an economic slowdown in China, the world’s second largest economy and second largest consumer of oil, will result in a major fall in crude oil demand. China, having celebrated the “Golden Week” national holiday last week, is poised to record a record number of coronavirus cases in coming weeks and the potential for shutdowns in major cities increases. The zero covid policy is having a severe impact on economic activity and for oil demand. At market close Brent crude was priced at $92.45.
UK gas market has made a valiant effort to push higher
The UK gas market has made a valiant effort to push higher this morning with opening trades on the front month up by 30.00p from the previous settlement. The market has been quite quick to release this premium and November is now changing hands at 292.87p, down by just over a penny. The December contract is marked down by 7.00p at the moment but bid/offer spreads for this contract are in excess of 10.00p. The prompt market is slow to get going this morning although opening bids suggest some easing which reflect the fact that the gas system is operation with an 18MCM surplus this morning.