Boost to crude oil prices as China increased import quotas

Near months are close to thirteen-month lows

Near futures on the NBP curve reversed the gains from the previous session on Friday as February settled at 162.54p.  Near months are close to thirteen-month lows and have shed between 7.50p and 14.40p over the week as the high levels of storage gas and robust LNG deliveries provide comfort to the markets while temperatures are to move towards the norm for the time of year. Prompt prices settled mixed on the day but movement either way was modest.  The spot settled 6.00p lower, despite the GB gas system running with a deficit for most of the day while the day ahead product increased by 2.00p.  

GB baseload power futures ended the week in decline

GB baseload power futures ended the week in decline as the power market took the lead from losses on the NBP curve and falling carbon prices.  The February contract eased by £6.50/MWh to settle at £163.00/MWh on Friday while the summer contract yielded £8.00/MWh to close at £159.50/MWh.  Carbon EUAs settled slightly lower too with the spot easing by 34 cent to close at €76.88 per tonne. Wind generation topped 16.5GW on Friday and forecasts for the week ahead are lower although will remain above average for the most part.  Baseload for the day ahead shed £9.45/MWh to settle at £117.96/MWh.  

Crude oil prices gained for a fifth session in a row

Crude oil prices gained for a fifth session in a row on Friday with hopes rising that demand in China is to pick up.  The world’s largest importer of crude oil opened its boarders last week for the first time in three years, and this has provided a boost to crude oil prices as China increased import quotas for 2023 by 20%.  There are signs that activity is picking up ahead of the Lunar New Year holiday at the end of the month which is expected to provide a boom in travel across the country.  A stronger dollar limited the upside to prices on Friday and at the close Brent was $1.25 a barrel higher on the day but $6.71 a barrel up over the week.  

Near curve futures are trending lower this morning

Temperatures have fallen to normal for the time of year and GB gas demand has increased to 321MCM for today.  Supplies are lagging by 21MCM according to the National Grid website, but the markets have ignored the forecasted shortfall in supplies.  On the prompt, the spot has yet to trade but the day ahead product is down over 10.00p to last trade at 157.00p.  Near curve futures are also trending lower this morning with February, the front month, 13.55p below Friday’s close while the summer has shed 13.07p.  In the crude oil markets, Brent is 32 cents a barrel lower at $84.96 a barrel.  

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