Crude oil prices are trading higher this morning

 NBP prices shed some of the premium added over the previous week

NBP prices shed some of the premium added over the previous week on Monday as futures prices fell across the curve. Near term however saw the front month of December firm slightly ahead of the final trading day on Tuesday. The December contract added 2.80p to settle at 291.28p a therm, while the Summer 2023 contract slipped 1.15p to end the session at 310.51p a therm. A combination of reduced Norwegian flows, an unplanned outage at the UK Perenco Bacton facility and wind generation forecasts below seasonal averages all helped to pressure the spot market on Monday. With that pressure the within day contract surged in early morning trading and held the value as the system remained undersupplied throughout the session again yesterday.

 Temperatures have once again been forecast to fall below seasonal averages

Although some gains were made, notably on the prompt GB baseload contracts released some premium on Monday. Contracts for the front month of December pulled back £12.50/MWh to settle at £297.25/MWh while further out the Summer 2023 contract slipped £1.50/MWh to finish the day at £276.50/MWh. Temperatures have once again been forecast to fall below seasonal averages for the coming week and wind generation is again expected to drop to just 4.60GWh for the week. Day ahead baseload contracts soared again on Monday to end the session at £385.00/MWh a rise of £137.00/MWh.

  Brent crude for a January delivery fell by $0.44

While crude oil for the front month of January fell marginally yesterday, they inched higher further out, a situation known as contango that could indicate near term oversupply. Demand outlook in China continues to worsen as coronavirus restrictions once again bring major manufacturing cities into lockdown. OPEC+ are due to meet on December 4th and although the Saudi Arabian Energy Minister recently ruled out any production cuts, there is growing expectation that such a policy may be implemented. Brent crude for a January delivery fell by $0.44 to settle at $83.19 a barrel yesterday.

Early trading this morning has seen prices firm on the contracts

Early trading this morning has seen prices firm on the contracts which have traded. The front month of December has climbed 19.72p from yesterday with the latest trade at 311.00p a therm. Likewise the Q1 2023 contract most recently traded at 336.25p a therm a rise of 13.74p, with many contracts yet to trade. The GB gas system has opened undersupplied by 6.30 MCM this morning against a demand of 354.30MCM. Crude oil prices are also trading higher this morning with crude oil for the front month of January last trading at $85.03 a barrel, up $1.84. On the spot the within day contract last traded at 300.00p a therm a rise of 11.95p.  

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