Volatile session on the NBP futures market

A blast on a gas pipeline in Russia

A volatile session on the NBP futures market saw prices flip from early losses to briefly spike before resuming their downward trajectory closing below the previous day’s settlement yesterday. A blast on a gas pipeline in Russia threatened to disrupt some of the limited Russian supplies still reaching Europe, but Gazprom have stated that remaining customers are still being supplied by alternative pipelines. Contracts for the front month of January traded at highs of 277.59p before slipping to 262.56p a therm, a decline for the day of 7.51p. Further out the summer 2023 contract traded as high as 270.00p before settling down 5.41p at 262.48p a therm. Further detail has emerged regarding the operating structure of the proposed European gas price cap of €180.00/MWh or approximately 450.00p a therm announced on Monday.

Declines in the GB baseload futures prices continued

Declines in the GB baseload futures prices continued for a third consecutive day yesterday reflecting recent declines in the NBP futures prices. Wind generation forecast to outturn 20% above seasonal averages and temperatures marginally above normal levels for the remainder of the week are also likely to dampen demand for heating. The front month of January slipped £4.00/MWh to settle at £288.00/MWh while the Summer 2023 contract dropped £3.25/MWh to end the day at £244.25/MWh. Carbon EUAs surged higher with December 2023 EUAs up €6.50 at €93.60 a tonne.

Brent crude markets rose again in early trading

Brent crude markets rose again in early trading yesterday, but volatility later in the afternoon capped daily gains to a moderate level. Having rallied last week, the US dollar once again declined supporting crude oil prices. The decision by the US Department of Energy to replenish the strategic reserve have also helped buoy prices. However, the surge in coronavirus cases in China is threatening to undermine the accelerated growth forecasts for the upcoming year. Crude oil contracts for the front month of February gained 19 cent to finish the day at $79.99 a barrel. Carbon prices rebound strongly following recent agreement by EU nations to reduce permits in the system by 4.30% from 2024-2027.

UK gas markets have once again opened in negative territory

UK gas markets have once again opened in negative territory this morning. Contracts for the front month of January have traded at 245.00 a therm down 17.56p, while the Summer 2023 contract has traded at 248.75p a therm, a decline of 13.73p. On the spot, the within day contract most recently traded at 225.00p a therm, up 9.95p on the settlement from yesterday while the day ahead yet to trade. The system has opened undersupplied by some 13.50MCM against a demand of 360.90MCM. Brent crude oil for the front month of February has traded higher again today at $81.12 a barrel, up $1.13 on the settlement.  

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