UK gas future contracts remain elevated

 Numerous unplanned outages supported NBP prompt contracts

UK gas futures continued to push lower during yesterday’s session despite slight gains in the front month. The recent downward sentiment has found support in healthy near-term fundamentals, nonetheless UK gas future contracts remain elevated when compared to historical prices, as a sense of uncertainty lingers in the market. The front month contract November settled at 197.41 pence per therm up 12.21p while Summer-23 took the brunt of the downward pressure, down 9.14p at 315.73 pence per therm. News that the UK government will reinstate a ban on fracking failed to influence market sentiment, as the potential fracking output would only meet less than 1% of UK gas demand.  Numerous unplanned outages supported NBP prompt contracts yesterday.

 GB Baseload power curve contracts pushed lower during yesterday’s session

GB Baseload power curve contracts pushed lower during yesterday’s session, while the front month November making marginal gains of £2.70/MWh to settle at £229.75/MWh. Significant premium fell out of the Q1-23 contract, as the contract ended the day at £599.50/MWh down £38.40/MWh. The downward sentiment in the wider energy complex fed into the market with gas and carbon contracts drifting lower. GB Baseload for Day ahead delivery moved in the opposite direction of the curve, as the contract gained 24% to settle at £81.88/MWh. Yesterday’s upward push was in line with the NBP prompt market gains.

Oil benchmarks traded in positive territory during Wednesday’s session

Oil benchmarks traded in positive territory during Wednesday’s session as the US dollar reached its lowest level in three weeks. The dollar was pressured by the 10-year US Treasury yield shedding value. Wednesday’s US Energy Information Administration report highlighted crude oil exports hit an all-time high of 5.1 million barrels per day while US crude imports have dropped to their lowest level in history. The discount between the WTI front month and Brent crude equivalent is over $7 per barrel. Brent Crude for December delivery settled at $95.69 a barrel, up $2.43 on the day and a $5.66 movement over the last five days of trading.

UK gas future contracts have made a small bounce back this morning

UK gas future contracts have made a small bounce back this morning, with the front month contract November currently trading at 202.00p per therm, up 4.59p. Q1-23 has also started the day marginally higher, up 1.52p at 368.50 pence per therm. The UK system is currently under supplied as an unplanned outage in the UK Continental Shelf persists. The wider energy complex has opened relatively flat this morning. Brent Crude front month is current trading at $95.73 a barrel up 4 cents while the EUA carbon spot contract is at €76.95 a tonne.

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