Prompt prices also finished lower
The GB gas markets opened softer after the Christmas break with near NBP contracts losing as much as 18.00p in the first hour of trading. Losses were pared back over the morning, and it looked as though prices could turn positive after the GB gas system flipped from running long to short having opened with a comfortable surplus. Later in the session the near curve resumed the downward slide and the January contract settled at 188.50p, the lowest settlement for the contract since before Russia invaded Ukraine. Losses were more modest further along the curve and summer settled at 218.82p, down 8.15p. Prompt prices also finished lower despite a tighter gas system through the afternoon and the day ahead settled marginally down at 158.90p.
Forecasts for high winds have brought some comfort to the baseload power market
The forecasts for high winds have brought some comfort to the baseload power market as wind generation is expected to pick up while the milder temperatures should temper demand. Baseload for the day ahead shed a significant amount of premium on Wednesday settling at £75.13/MWh, the lowest settlement price since the last week in October. Baseload futures at the front of the curve ended the day between 5 and 9% down, tracking gas futures on the NBP lower. The January contract settled at £218.50/MWh, falling £21.50/MWh from Friday’s close.
Prices had been buoyed by the threat of possible cuts in Russian oil
The surge in Covid-19 cases in China put a damper on the rebound in crude oil prices yesterday and both benchmarks settled lower. Prices had been buoyed by the threat of possible cuts in Russian oil exports earlier in the week but yesterday the market weighed the concerns of the surge in new virus cases in the world’s second largest oil consumer against the chances of easing restrictions boosting the country’s oil demand. The markets also responded to talks of further interest rate hikes in the U.S. as the Fed endeavours to stem the rate of inflation. Brent for February delivery settled at $83.26 a barrel, down 66 cents from Friday’s close.
The summer is trading higher this morning
The GB gas system is forecast to run 15MCM short against today’s demand of 272MCM. LNG send out is down on last week with flows around 55MCM currently nominated for today. Trading on the prompt is yet to get going while the curve has opened firmer. The January contract last traded at 202.00p, up 13.50p on Wednesday’s close. The summer is also trading higher this morning with the contract exchanging 8.68p up at 220.50p. The latest outbreak of Covid-19 cases in China continues to raise concerns of a recovery in the world’s second largest oil consumer and crude oil prices have continued to slide with Brent down a further $1.42 a barrel.