NBP prices retreated significantly on Tuesday
NBP prices retreated significantly on Tuesday, removing some of the recently made gains. The low wind generation, 20.00% below seasonal averages, recorded over recent days is expected to end over the remainder of the week, with forecasts for next week showing generation beyond normal levels. This should reduce the currently high, demand for gas-fired generation. Total UK gas demand on Tuesday was roughly 29.00MCM above normal levels at around 345.00MCM, with the system operating marginally undersupplied throughout the day. Contracts for a February delivery declined 19.06p to close at 147.66p per therm with a similar fall of 18.92p recorded for the upcoming summer 2023 contract which closed at 152.52p per therm. On the prompt the within day and day ahead contracts slipped an average of 19.50p per therm.
Declines in the NBP gas contracts once again weighed on the GB baseload curve yesterday
Declines in the NBP gas contracts once again weighed on the GB baseload curve yesterday, with further pressure coming from the weakening carbon prices. Contracts for a February delivery closed down £11.75/MWh at £142.75/MWh. Next week is expected to see a return of windy conditions in the UK, with wind generation forecasts increasing to 20.00% beyond seasonal average levels. Prompt prices experienced the same downward pressure yesterday with the day ahead falling by £29.19/MWh to settle at £123.73/MWh.
Crude oil markets declined yesterday
Having recorded gains for the past 3 days, crude oil markets declined yesterday erasing some of the recent movement. Hopes of a recovery in Chinese demand were once again tempered by recessionary fears. Positive European data shows a nominal economic growth within the EU for January compared to December. However, by the same economic metric the decline of the UK economy has accelerated, fuelling future oil demand fears. The Federal Reserve are due to meet next week when another interest rate rise of 0.25% is expected. Crude oil for a March delivery ended the day at $86.13 a barrel, down $2.06 on the day, while West Texas Intermediate closed $1.49 lower at $80.13 a barrel.
Crude oil has opened relatively flat
UK gas futures markets have opened with further, slight declines this morning. The front month of February has most recently traded down 1.16p at 146.50p a therm, while the summer 2023 contract has traded at 153.13p per therm. On the prompt, the within day contract has yet to trade, but the day ahead is trading at 145.00p per therm as the UK system has opened balanced with a demand of 360.20MCM. Crude oil has opened relatively flat with the last trade at €86.08 a barrel. Carbon prices are likewise flat so far today with the December 2023 EUA up 18 cent at €81.85 a tonne.