Momentum in the UK gas market was mixed yesterday
Momentum in the UK gas market was mixed yesterday, with prices opening in positive territory, before reversing the previous sessions gains in the afternoon. However, in the last hours of trading the market moved once again and gains were eroded to fractional upticks. The front month contract February opened at 160.00p per therm before dipping to a low of 145.29p in the afternoon, the contract eventually settling down 2.03p at 151.85 pence per therm. With no notable change in market fundamentals, the mixed movement derived from trading activity on the market. The scale of losses along the prompt market were slightly muted, with gas for day ahead delivery trading 2.00p down at 158.00 pence per therm.
GB baseload power contracts took a step back yesterday
GB baseload power contracts took a step back yesterday, with marginal losses across the curve. The front season Summer 23 was the only outlier, moving £0.50/MWh higher on the day to settle at £154.00/MWh. Fractional losses in the UK gas market fed into power prices, with the front month contract shedding £3.75/MWh to settle at £156.75/MWh. GB baseload power for day ahead delivery continued to release value during yesterday’s session, as the contract settled at £115.64/MWh down £19.95/MWh on the day.
The overall theme in oil markets remains uncertain
Brent crude opened the session at $84.34 before edging higher as the day progressed, eventually settling at $86.16 a barrel, its highest point of the new year. For context, during the same period in the previous year the front month contract settled at $107.93 a barrel. Optimism over the reopening of China the world’s second largest economy remains the supporting pillar for the upward trend. It must be noted that if China requires additional crude imports it will likely come from Russia as the Chinese have gained significant discounts from purchasing undesirable Russian oil. Despite Chinese optimism, the overall theme in oil markets remains uncertain, as global economies remain unpredictable.
UK gas prices are relatively flat this morning
UK gas prices are relatively flat this morning, with fractional losses of 0.27p on the front month which last traded at 152.25 pence per therm. The front quarter is down 3.36p at 153 pence per therm while all other curve contracts are yet to trade. Sentiment in the prompt market is in line with the curve, with the Within day and Day ahead contract last trading 4.00p and 2.00p lower respectively. The UK gas system is in a deficit of 8MCM as near-term weather forecasts suggest a continuation of cold weather this weekend. Brent crude continues to gain value this morning, last trading at $86.72 a barrel.