The UK gas market reversed direction yesterday
The UK gas market reversed direction yesterday to record nominal losses during Monday’s session. Despite British temperatures and wind power generation both projected to remain below seasonal normal levels for the remainder of the week, heathy storage levels prevented an uptick in prices. Unplanned outages at the Norwegian Oseberg and Visund facilities reduced capacity by 21.00MCM on Monday with 17.00MCM remaining offline on Tuesday. It is unclear when the facilities will resume operation, however aggregated European storage is currently 76.00% full, exceeding the position of the previous five years. Contracts for the front month of February slipped 2.18p to close at 166.72p per therm, while further out the summer 2023 contract dropped 1.84p to settle at 171.45p per therm.
The GB baseload power futures market echoed movements in NBP market
The GB baseload power futures market echoed movements in NBP market yesterday with prices declining. Contracts for the front month of February slipped £10.00/MWh to close at £154.50/MWh. With UK temperatures and wind generation forecasts expected to remain unseasonably low for the remainder of the week, baseload contracts for the day ahead gained £43.12/MWh yesterday to close at £182.41/MWh. Average temperatures and windy conditions are however set to return next week. EUA carbon markets gave up some of the recent gains with the 2023 December contract down 73 cent at €84.33 a tonne.
Crude oil markets were subdued yesterday
Crude oil markets were subdued yesterday but continued to edge higher with brent making gains for a third consecutive day. Buoying prices was the sustained optimism for the Chinese economy and the potential for a corresponding recovery in demand in the world’s largest crude oil importing nation. China is once again taking delivery of more oil, increasing inventories in order to boost supplies in the recovering economy. Amid the rebuilding of Chinese inventories and reduced Russian production, the International Energy Agency has warned of the potential for tight supplies this year. Brent crude for the front month of March finished the session up 56 cent at $88.19 a barrel while West Texas Intermediate gained 31 cent to finish the day at $81.62 a barrel.
NBP gas contracts have opened sharply lower this morning
NBP gas contracts have opened sharply lower this morning. Contracts for the front month of February have traded at 150.00p per therm, a fall of 16.72p while the summer 2023 contract is trading down 17.45p at 154.00p per them. The UK system has opened with a marginal undersupply of 6.30MCM against a demand of 362.90MCM. The within day contract has yet to trade, but the day ahead has also come under pressure last trading at 154.00p per therm. Crude oil markets have also opened slightly softer, with the front month of March last trading at $87.93 a barrel, down 26 cent. Carbon prices have continued to fall, with the December 2023 EUA down €1.77 at €83.41a tonne.