Early gains on the NBP curve were partially reversed late in the session

The NBP curve finally edged higher on Thursday

After a run of seven days of declines gas prices on the NBP curve finally edged higher on Thursday but earlier gains were partially reversed late in the session.  A combination of a short gas system and increased buying activity on the front month contract dragged the near curve and the prompt higher yesterday.  The January contract along with the Q1-2023 product expired on the ICE trading platform and prompted some last-minute buying.  The outgoing front month settled at 194.21p, up 5.71p day on day, the first quarter for 2023 expired 6.45p higher at 205.04p.  The GB gas system struggled to balance yesterday despite demand being revised lower through the day.  Having opened 15MCM shy the system was still 8MCM short midway through the afternoon and this propelled prompt prices on the day.  

 The front months on the baseload power curve settled lower

The front months on the baseload power curve settled lower on Thursday with forecasts for increased wind generation and low demand into January weighing.  The January contract settled £7.50/MWh lower at £211.00/MWh and February was marked £6.00/MWh down at £225.50/MWh.  Thin trading on contracts past the near curve left longer contracts a touch higher on the day. Baseload for the day ahead settled slightly higher yesterday supported by gains on the NBP prompt, despite forecasts for wind generation to get close to 20.0GW on Friday.  Wind generation met over 50% of GB power demand yesterday.  

 Brent for February delivery shed a dollar a barrel yesterday

Brent for February delivery shed a dollar a barrel yesterday to close lower for a second day.  It was the last day for trading for February on ICE and the contract settled at $82.26 a barrel. The spread of the Covid-19 virus in China continues to cause concerns and yesterday a number of countries have imposed travel restrictions on tourists from China.  It was hoped that a relaxing of restrictions in China would help with demand for oil but it would appear that the opposite is more likely as hospitals in China’s main cities struggle to cope with the number of patients presenting with symptoms.  The U.S. released its inventory data and a slight build in crude oil stocks was noticed which was also bearish for the market.  The dollar weakened a touch which limited losses on the day.  

Crude oil prices are slightly down

As we head into the new year holiday weekend, GB gas demand has been revised down to 244MCM, but supplies are lagging again with a deficit of 14MCM forecast.  Once again, the prompt market has been slow to awaken, and the board is clear with no bid or offers to be seen.  NBP futures have traded with February, the new front month on ICE exchanging at 195.00p, down 15.04p while March is 12.36p lower at 199.00p. Crude oil prices are slightly down with Brent now with March as the lead month, last trading at $83.45 a barrel.  

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