Prices continued to ease for a second day on Wednesday
Prices continued to ease for a second day on Wednesday, with a focus on near-curve contracts. Once again, the contributing fundamentals included the healthy levels of LNG being delivered to British terminals while the unseasonably mild temperatures are gradually forecast to fall over the coming week approaching average levels. Contracts for a February delivery pushed 10.67p lower to settle at 160.63p per therm, while the summer 2023 contract fell 10.18p to finish the session at 171.42p per therm. Despite the system running undersupplied throughout the day by as much as 30.00 MCM the within day contract also released premium, retreating by 6.55p to 154.05 p per therm while the day ahead contract slipped 2.25 to settle at 152.25 p per therm.
Prices for GB baseload futures continued to decline yesterday
Prices for GB baseload futures continued to decline yesterday as unseasonably mild weather and high wind generation provided pressure to the near-curve contracts. The February contract retreated by £13.00/MWh to end the session at £162.00/MWh while the upcoming summer 2023 contract shed £10.30/MWh to settle at £162.20/MWh. Carbon EUAs continued to fall yesterday with the December 2023 contract down €1.80 to settle at £79.00 a tonne. Despite ample wind power generation, baseload contracts for the day ahead posted a nominal gain of £2.11/MWh to end the day at £108.83/MWh.
Brent crude contracts pushed higher for a third consecutive day
Brent crude contracts pushed higher for a third consecutive day yesterday as contracts gained across the curve. Expectation of a surge in demand from China helped to drive prices higher. With the removal of quarantine requirements for inbound travel, Beijing is anticipating a doubling of passenger trips over the Lunar New Year holiday compared to last year. Inventory data from the Energy Information Administration showed an 18.90m barrel increase in US crude oil stocks, however levels are still down on the same period last year. The front month of March added a further $2.57 to end the session at $82.67 a barrel. West Texas Intermediate experienced a similar uptick yesterday with the front month of February adding $2.29 to settle at $77.41 a barrel.
UK market has opened higher this morning
The UK market has opened higher this morning, although multiple contracts have yet to trade. The NBP front month of February has traded 6.68p higher this morning at 167.31p per therm with the summer 2023 contract most recently trading marginally up 2.58p at 174.00p a therm. Prompt markets are also marginally higher, with the within day contract up 1.95p at 156.00p per therm and the day ahead contract up 2.75p at 155.00p per therm. The system has opened marginally undersupplied by 5.00 MCM this morning against a demand of 357.40MCM. Crude oil markets are continuing their recent uptick, with the March contract last trading up 90 cent at $83.57 a barrel.