Temperatures for the week ahead are to rise above the seasonal norm
Revised forecasts that showed temperatures for the week ahead are to rise above the seasonal norm saw prompt and near curve contracts retreat on Friday. The January contract was almost 30.00p down by mid-morning and by the end of the session had yielded 48.71p to settle at 288.42p. Over the week the lead month has dropped 57.49p while the summer contract is 58.57p lower. Summer-23 settled at 282.92p on Friday and shed 43.26p on the day. There were similar losses to the prompt on the day despite the GB gas system slipping into a deficit in the afternoon. The losses to the spot were pared back as a result but the day ahead product closed 57.55p down while the balance of month contract shed 44.80p to close at 282.25p.
GB baseload power futures tracked losses to gas futures
With temperatures in Britain and northern Europe expected to rise above the norm this week, GB baseload power futures tracked losses to gas futures on the NBP on Friday. The front month declined by £26.00/MWh on the day bringing the loss to £141.25/MWh over the five days last week. The summer contract fell by £23.90/MWh on Friday to close at £264.75/MWh. Baseload for the day ahead shed almost half Friday’s value as it settled £170.29/MWh down at £187.18/MWh. Forecasts for increased wind generation along with lower demand should see supply margins widen for the week ahead and add more pressure.
Fears of a global recession swept through the equities markets
Fears of a global recession swept through the equities markets on Friday and drove crude oil prices lower too. The aggressive monetary policies adopted by western banks over recent months and the signals they will continue into the new year has raised concerns of negative growth. Governments on both sides of the Atlantic have pledged to continue to fight inflation even at the risk of going into a recession and crude oil prices remained under pressure on Friday. While Brent for February delivery settled $2.17 a barrel lower, over the week the contract was almost $3.00 a barrel higher as it settled at $79.04 a barrel. West Texas Intermediate fell $1.82 on Friday to $74.29 a barrel.
The crude oil markets have recovered a little from Friday’s declines
GB gas demand has fallen by almost 25% from Friday’s levels with Monday’s demand pitched at 310MCM. The National Grid’s site has supplies slightly short at 308MCM for today with LNG and Norwegian imports expected to make up the lion’s share of supply today. The spot has yet to trade on the prompt screen, but the day ahead is 25.50p down at 257.00p. On the curve, January last traded at 268.00p, down 20.42p while the summer has fallen by 16.92p to 266.00p. The crude oil markets have recovered a little from Friday’s declines with Brent 65 cents a barrel up at $79.69.