GB baseload power records sharp losses

08 November 2022

NBP near curve declines continue

The NBP near curve followed up Fridays declines with more losses on Monday.  Prompt prices eased as UK gas demand fell due to higher output from wind generation in the power stack while robust LNG deliveries have pressured the winter months.  The front month contract closed at its lowest since June 13th, when the contract settled at 253.21p.  The December contract climbed through the summer, reaching a peak of 875.14p on August 26th. The front month settled at 267.44p yesterday, down 15.59p from Friday’s close or 607.70p from its peak near the end of August.  The spot and day ahead closed 10.00p down on the day while the balance of month product shed 15.00p.

GB baseload record sharp losses

The remaining winter months on the baseload power curve recorded sharp losses on Monday.  December fell by £21.50/MWh but the quarter 1 months averaged declines of £43.75/MWh.  The market reacted to declines to near curve contracts on the NBP while clean spark spreads also eased.  Carbon prices moved higher on the day which limited losses as the spot price for EUAs gained €1.71 per tonne. Forecasts for increased wind generation weighed on the baseload prompt yesterday.  The day ahead product shed £29.38/MWh as wind generation is expected to top 14.0GW on Tuesday.

Brent oil retreats from recent high

There were mixed signals from China yesterday with latest reports showing increases in Covid-19 cases which countered earlier reports of a relaxing of restrictions.  Brent settled 65 cents lower at $97.92 a barrel while West Texas Intermediate settled at $91.79, down 82 cents a barrel.  Prices had firmed earlier in the session on hopes that China would be reopening the economy, and this would tighten supplies.  However, with the latest outbreak of the coronavirus, health officials have confirmed that strict containment measures will remain in place. Crude oil prices may have fallen further on the day if the U.S. dollar had not weakened.

A short system providing support in early trading

A short gas system has provided some support to the prompt this morning with the spot and day ahead products reversing yesterday’s losses.  GB gas demand for the day is 252MCM and supplies are just 5MCM short.  LNG send out is around 6MCM below yesterday’s levels and this seems to be the only change in supplies.  On the curve, the front months have opened firmer with December 14.08p up at 281.52p, further out the summer contract is just 6.15p higher in early exchanges.  crude oil prices opened higher but have retraced the early gains and Brent last traded $1.07 down at $96.85 a barrel.  
Find out more about our Commercial Energy Services