January assumed front month status on ICE yesterday
Forecasts for increased gas demand continued to drive the NBP prompt higher on Wednesdays as the spot and day ahead products gained 19.00p. Near curve contracts were also lifted as the GB gas system has had to employ storage gas reserves over the last few days to balance. January assumed front month status on ICE yesterday and settled 26.62p higher at 369.65p. The summer contract settled at 354.47p while contracts further along the curve rose more modestly. Lower wind generation over the next week or so is to combine with cooler temperatures to add to demand for the first week of December.
GB baseload futures were marked higher on Wednesday
With higher demand driving the NBP prompt and near curve prices higher, GB baseload futures were also marked higher on Wednesday. December expired yesterday at £354.50/MWh after gaining £27.75/MWh on the day. Contracts for the months covering Q1-23 recorded gains in the order of £43.00/MWh while the summer settled £19.25/MWh higher at £310.50/MWh. Wind generation is forecast at just 3.0GW for Thursday which is well below recent levels and this continues to support the prompt. The day ahead product was little moved at £330.85/MWh.
Brent settled higher for the first time in over a week
Hopes of a recovery in Chinese demand combined with a weaker dollar on Wednesday as Brent settled higher for the first time in over a week. The Energy Information Administration also reported the largest drawdown of crude oil stocks in almost three years which added to the bull’s side yesterday. Talks of OPEC+ not moving from current policies on output capped gains on the day despite earlier rumours that the group were to consider reducing output when they meet next on Sunday. At the close, Brent for January delivery settled at $85.43 a barrel up $2.40, the February contract which will take over as front month from today added $2.72 to close at $86.97 a barrel.
Crude oil markets have continued to firm
The futures market for the NBP opened with strong gains from the get-go this morning with January peaking at 406.25p, up 36.60p on last night’s close. The latest trade for the new front month came in at 389.02p, which is down 17.23p from the morning high. Further along the curve, the summer contract is 17.53p higher at 372.00p while contracts past this have yet to trade. Prompt prices have not opened yet, but spreads are wide. In the crude oil markets Brent has continued to firm with the February contract at $87.51 up $2.08 a barrel.