The gas markets reverted to declines on Friday

Above seasonal norm temperatures pressured the prompt

Having settled higher for the first time in six sessions on Thursday, the gas markets reverted to declines on Friday with near months closing lower by an average of 21.22p.  Forecasts for increased wind generation along with above seasonal norm temperatures pressured the prompt on the day despite news of an unplanned outage to Norwegian supplies.  The spot settled 34.00p down at 68.05p while the day ahead closed at 63.05p, down 32.00p. On the curve, the summer contract yielded 18.63p on Friday to settle at 348.95p.  The front month settled at 204.12p, down 19.88p but over the week was 57.23p lower.

Fall in gas futures on the NBP curve pressured the baseload curve

The fall in gas futures on the NBP curve pressured the baseload curve on Friday while gains in carbon limited the downside.   The front month settled £23.70/MWh lower on Friday but was £118.20/MWh down for the week.  Declines further out the curve were more modest with the summer easing by £8.25/MWh. Carbon EUAs rebounded with the spot closing at €68.58 per tonne, up €1.97 per tonne. The day ahead product closed flat at £100.50/MWh on Friday despite the forecasts for higher wind generation. The renewable energy source is expected to contribute over 10.0GW from the weekend and should displace gas fired generation from the power stack.

 Brent settled $1.12 a barrel higher

A weakening dollar combined with hopes of improved Chinese demand to boost crude oil prices rise on Friday.  Fears of an economic downturn and further increases to the U.S. interest rates capped gains on the day.  A representative from the Federal Reserve said late in the week that U.S. interest rates could top 4.0% by the end of the year.  The markets expect that China’s loosening of their Covid policies will see demand in the world’s second largest oil consumer pick up while interim reports could be bearish.  Brent settled $1.12 a barrel higher at $93.50 a barrel, while over the week was $1.87 a barrel up.

 Brent has reversed Friday’s gain

GB gas demand is forecast lower at 236MCM for today and this reflects the increase in wind generation which has displaced gas fired generation from the power stack.  The system is forecast to run 10MCM long and LNG send-out is up at over 55MCM for today ahead of the 12 deliveries due by the end of next week.  The futures market has opened softer with November 24.29p down at 179.83p.  Prompt prices are yet to trade but this market is expected to open lower too.  Brent has reversed Friday’s gain with the latest trade going through at $91.87 a barrel.

Read more carbon market news in our Insights section.