Prompt prices climbed on the day
After two days of declines near curve contracts on the NBP recovered some of the losses on Thursday. Prompt prices climbed on the day too, boosted by a short gas system although demand levels have been steady at between 250 and 260MCM much of the week. The spot and day ahead products added 10.00p and 12.80p respectively and the near curve was buoyed with February settling 6.79p up at 167.42p. The summer contract added 3.08p yesterday and contracts past this were flat or recorded marginal losses. The near curve has been switching between gains and falls this week suggesting prices have reached a plateau for the moment but will remain overly responsive to any reports of changes in weather forecasts and supply issues.
Baseload for the day ahead edged higher yesterday
Higher carbon and natural gas prices fed into the baseload near curve on Thursday as contracts were marked an averaged of £5.90/MWh higher over the day. Futures contracts past the front winter posted modest declines in a similar vein to the longer curve on the NBP. Carbon EUAs recovered some of the previous session’s losses with the Dec-23 contract settling at €80.17 per tonne, up €1.17. Wind generation is forecast to remain above average for the week ahead but was revised a touch lower yesterday. Baseload for the day ahead edged higher yesterday propped up by gains on the NBP prompt.
Reopening of China’s boarders has boosted hopes of higher oil demand
Crude oil prices continued to firm on Thursday with demand growth optimism and a drop in the U.S. consumer price index for December providing the support. Brent settled $1.36 a barrel up at $84.03 for the March contract while West Texas Intermediate for February delivery settled just shy of a dollar higher at $78.39 a barrel. The drop in the consumer price index suggest that inflation was now on a sustained downward trajectory in the U.S. and provides hopes that the Federal Reserve will ease up on the scale of interest rate increases next month. The reopening of China’s boarders has boosted hopes of higher oil demand this week with Brent up almost $5.50 a barrel over the last four days.
Brent has continued the bullish form
The front month of the NBP futures curve, February, opened at 174.00p before moving a penny higher but is currently 9.00p down intraday or 1.42p lower day on day at 166.00p. The summer contract has also backed off its earlier high of 177.25p and last traded at 170.50, down 4.00p. The GB gas system is forecast to run short again today, but the prompt has not responded yet. In the crude oil markets, Brent has continued the bullish form shown this week and is up a further 40 cents a barrel in early trading this morning.