Yesterday was a day of two halves in the UK gas market
Yesterday was a day of two halves in the UK gas market, with contracts opening higher from the offset before easing in the late afternoon to create wide margins between market highs and lows. The front month contract December peaked at 313.50p before falling back to settle at 298.95 pence per therm up 26.07p on the day, while Q1-23 hit 350.00p before scaling back to settle at 337.17p per therm. Amid a lack of any key fundamental changes, yesterday’s session highlighted that volatility persists within European gas markets despite healthy near-term fundamentals. The easing of risk premium in the late afternoon was a welcomed indication that the bullish run may have been short lived. Further along the curve gains were marginal in comparison with the 2024 seasonal contract’s gaining 6.03p per therm on average.
GB baseload futures pushed higher on Tuesday
GB baseload futures pushed higher on Tuesday, taking direction from an uptick in NBP gas prices and significant spark spreads risk premiums. Jan-23 contract took the brunt of the upward momentum, gaining £21.70/MWh to settle at £500.00/MWh. While further along the curve gains were limited, Summer-23 the bellwether contract ended the session at £257.50/MWh, up £9.00/MWh. Baseload for day ahead delivery remained bearish when compared to previous months, trading at £107.10/MWh on average for the month of November to date. The contract settled at £123.00/MWh yesterday, up £16.00/MWh day on day. Weather fundamentals supported the gains.
Brent crude oil benchmark fell in the early hours of trading
Brent crude oil benchmark fell in the early hours of trading, before gaining momentum in the late afternoon to settle higher on Tuesday. The front month dipped to a low of $91.31 a barrel before settling at $93.86, up $0.72 cent a barrel session on session. A firm US dollar encouraged the downward moment in the morning. However, support was found in supply concerns. As the looming EU ban on seaborne Russian crude is set to take effect on December 5 and will displace 1.1 million barrels per day according to the International Energy Agency.
NBP prompt market has taken a step back this morning
UK gas prices have opened in negative territory this morning. December the front month last traded at 284.01p down 14.89 pence per therm while Summer 23 is down 1.73p at 295.00 pence per therm. The NBP prompt market has also taken a step back this morning, with the spot contract currently trading down 21.05p at 92.00 pence per therm. EUA carbon market is also on a negative trajectory this morning, with Dec-22 currently trading at €74.80 a tonne, down €1.51. Brent crude is moving in the opposite direction, trading up $0.57 at $94.43 a barrel.