NBP gas futures surged higher towards the close of the session

 The system remained under supplied throughout the session

NBP gas futures surged higher towards the close of the session yesterday. Reports that the EU executive proposed a gas price cap for month ahead contracts have the potential to place additional demand on UK gas exports. Contracts for the front month of December traded as high as 290.00p before settling at 274.29p a therm a day on day rise of 5.30p. Further out gains were higher with the 2023 contract rising by 11.89p to settle at 302.51p a therm. The system remained under supplied throughout the session yesterday and the within day contract added 11.00p to settle at 121.05p a therm.

Tuesday’s session saw GB baseload power futures continue to firm

Tuesday’s session saw GB baseload power futures continue to firm for a second day. Contracts for the front month of December pushed up £15.50/MWh to settle at £284.50/MWh but the greatest rise of £20.50/MWh was for Q1 23 which ended the day at £380.50/MWh. UK temperature forecasts have been revised down to seasonal averages through next week increasing heating demand. Wind generation forecasts for next week have likewise been revised down to 20% below seasonal averages. Baseload for the day ahead delivery shed £51.50/MWh to settle at £121.50/MWh.

 Brent crude oil reversed some of the recent losses

Brent crude oil reversed some of the recent losses and posted gains during the session yesterday. The rebound from recent lows followed the announcement from the Saudi Arabian Energy Minister dismissing reports OPEC+ are considering increasing output targets. OPEC+ remains committed to its current production levels as China’s demand remains weak and global recessionary concerns persist. The decline of the US dollar has provided some support to oil prices for those purchasing in other currencies, however concerns for Chinese demand amid the surge in coronavirus cases in the world’s top crude oil importer continue. Brent crude oil for a January delivery settled up $0.91 at $88.36 a barrel.

 Early gains have also been recorded on the Q1 23 and Summer 23 contracts

The UK gas market has opened strong and posted significant gains in early trading this morning. The front month of December last traded at 303.04p a gain of 28.75p a therm. Early gains have also been recorded on the Q1 23 and Summer 23 contracts which last traded at 348.25p a therm and 302.64p a therm respectively. The UK system has opened undersupplied by 5.60MCM against a demand of 365.90MCM. The prompt has yet to trade and the day ahead last traded at 115.00p a therm, a moderate rise of 4.95p. Brent crude oil for the front month of January last traded up $0.44 at $88.80 a barrel.

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