UK gas markets yesterday saw near term futures move marginally higher
A mixed day on the UK gas markets yesterday saw near term futures move marginally higher after three consecutive days of losses, while further out, minor declines continued. Overall movements up or down were slight with contracts for the front month of January adding 2.27p to end the day at 341.32p a therm while the Summer 23 contract retreated 1.66p to settle at 335.52p a therm. Total UK gas demand rose to 409.00MCM on Tuesday as a combination of freezing temperatures and low wind power generation increased the demand for gas. Low temperatures and wind power forecasts are set to continue for the remainder of the week. Significant LNG deliveries to the UK are set to continue with 16 laden vessels expected to berth at British facilities by December 27th.
GB baseload power futures experienced significant declines
Prompt and near term GB baseload power futures experienced significant declines again yesterday. The front month of January pushed £39.00/MWh lower to settle at £359.50/MWh, bringing the contract £133.50/MWh lower over the past 5 days. Further along the curve slight gains were observed with the Summer 2023 contract settling up £2.50/MWh at £302.50/MWh. The day ahead baseload contract tumbled £67.10/MWh to finish the day at £347.13/MWh. Carbon prices released some of the previous days gain with the EUA spot contract falling €1.38 to settle at €88.53 a tonne.
Crude oil markets continued to rebound on Tuesday
Crude oil markets continued to rebound on Tuesday extending the gains made on Monday. The recent decline in the US dollar has helped boost demand while fears of supply disruptions following the Keystone Pipeline rupture have also supported the market. A more positive economic picture is also emerging in the US where the inflation rate has fallen from 7.70% in October to 7.10% in November raising expectation of an increased oil demand. The US Federal Reserve are due to meet on Wednesday and a further interest rate hike of 50 basis points is considered likely. Contracts for a February delivery posted a gain of $2.69 to finish the session at $80.68 barrel. West Texas Intermediate posted a similar gain of $2.27 to end the day at $75.44 a barrel.
UK gas futures have opened with mixed sentiment
UK gas futures have opened with mixed sentiment this morning as prices have broadly retreated, though with some contracts showing slight increases. The front month of January most recently traded at 331.41p a therm, a decline of 9.91p. Both Q1 23 and Summer 23 have also traded down at 334.80p and 329.00p a therm respectively. On the prompt, the day ahead has yet to trade but the within day contract has traded at 348.00p a therm, down 5.05p despite the UK system opening with a significant undersupply of 16.20MCM against a demand of 364.70MCM. Crude oil prices have edged higher with the front month of February up 61 cents at $81.29 a barrel.