GB gas demand is expected to pick up this week
GB gas demand is expected to pick up this week with cooler temperatures forecast for the week while lower wind generation should also increase demand. The gas system was short on Friday and this provided support to the spot which settled 42.00p higher at 110.05p while remaining prompt products eased marginally. Near futures opened around 5.00p lower but failed to hold losses by the end of the session as the December contract added 3.66p and the summer settled 4.16p higher. Over the week these contracts were up by around 43.00p with contracts further out an average of 12.50p higher for the week. UK ports are expected to receive 14 LNG deliveries by the first weekend in December and the news that the Freeport LNG plant hopes to restart by middle of next month was welcomed.
GB baseload power futures shed premium again on Friday
GB baseload power futures shed premium again on Friday with declines in carbon and clean spark spreads countering late support from the NBP near curve. The front month contract shed £9.60/MWh while contracts for the first quarter of 2023 were down by £20.50/MWh. Further out, losses were more marginal with summer almost flat at £254.75/MWh. Wind generation fell at the weekend and is forecast to be down on recent levels but still should come in above seasonal norms. Baseload for the day ahead closed flat at £113.12/MWh on Friday.
Crude oil prices eased for a third straight session
Crude oil prices eased for a third straight session on Friday with demand woes weighing heavily. Its been reported that Chinese refiners have requested Saudi Aramco to reduce deliveries of crude oil for December with the latest wave of Covid-19 cases expected to curb demand for the world’s second largest oil consumer. A strong U.S. dollar also weighed on crude oil prices last week as the U.S. Fed promised to continue to tackle inflation and are expected to apply a further increase to interest rates next month. Brent settled $2.16 a barrel down at $87.62, while West Texas Intermediate shed $1.56 to close at $80.08 a barrel.
Near futures have opened a touch higher this morning
Near futures have opened a touch higher this morning with December, the front month 5.49p up at 277.00p. The summer has traded just the once and is also around 5.00p higher at 295.00p. On the prompt, the spot has eased by 16.05p with the last trade going through at 94.00p, while the balance of month contract is also down at 94.50p. GB gas demand is pitched at 298MCM, and the system is close to balance. In the crude oil markets, prices have softened with the January contract for Brent down 55 cents a barrel at $87.07 a barrel.