NBP futures market has opened for 2023 with declines

Final trading session for 2022 saw NBP gas prices retreat

The final trading session for 2022 saw NBP gas prices retreat across the curve with the greatest decline observed for the front month. Contracts for a February delivery shed 23.99p to settle at 186.05p a therm while the upcoming Summer 2023 contract fell 18.79p to finish the day at 201.12p per therm. Despite a cold spell in early December which caused a 40.00% month on month increase in gas demand across the UK and EU, ample storage and significant LNG deliveries covered the additional demand, resulting in contracts for a January 2023 delivery shedding 148.82p or 43.38% over the course of the month. With 18 LNG vessels scheduled to dock at UK facilities by January 14th, continued pressure remains on near-curve contracts.  

  GB baseload power futures contracts resumed their recent declines

GB baseload power futures contracts resumed their recent declines on Friday echoing the weakening NBP gas prices. The front month of January experienced the largest drop, ending the session down £24.00/MWh at £187.00/MWh. Further out the Summer 2023 contract shed £8.15/MWh to finish the day at £202.50/MWh. Wind generation for the remainder of the week is forecast to exceed seasonal averages by 20.00% with temperatures set to average well above normal levels likely reducing the demand for heating. The EUA carbon market extended recent losses with the spot contract settling at €78.70 a tonne, down €2.80 on the day.  

Brent crude prices reversed direction on Friday

Brent crude prices reversed direction on Friday and settled up after two days of declines. Contracts for the new front month of March added $2.54 to finish the session at $85.91 a barrel. The rising cost of crude oil came despite the International Monetary Fund warning that the key engines of global growth, the economies of the United States, Europe and China, were all slowing, lowering predictions for the global economy and thus potential demand for 2023. Increasing crude oil prices could be in response to Russian president Vladimir Putin banning the supply of crude oil products from February first, to nations that last month agreed to impose a price cap on Russian oil.  

Brent crude has slipped marginally in trading this morning

The NBP futures market has opened for 2023 with declines observed for the contracts which so far have traded. The front month of February most recently traded at 178.50p per therm a decline of 7.55p while the Summer 2023 contract has traded at 194.00p a therm down 7.12p. The system has opened significantly undersupplied by 31.30 MCM against a demand of 358.50 MCM. On the spot, the within day has yet to trade while the day ahead has traded at 162.20p a therm. Brent crude has slipped marginally in trading this morning with the front month of March most recently trading down 74 cent at $85.17 a barrel.

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