UK gas market appeared firm in the early hours of trading yesterday
Sentiment in the UK gas market appeared firm in the early hours of trading yesterday, however as the day progressed the market lost grip of its gains and eventually settled lower on the day. NBP front month gas contract settled just shy of its lowest point of the month at 139.22 pence per therm. Prices along the curve were also appealing when compared to recent volatility, the bellwether contract Summer 23 ended the session 4.68p lower at 143.07 pence per therm, well below its peak of 726.26 pence per therm on August 26th of last year. Losses in the UK prompt market were extended for the fourth consecutive session, amid ample supply meeting seasonally weak demand. Gas for day ahead delivery ended the session at 142.02p, down 2.00p on the day.
Bullish momentum in the carbon markets yesterday
GB baseload future contracts shrugged off the bullish momentum in the carbon markets yesterday, with minor losses along the near curve. However, contracts further along the curve remained firm. Spark spreads have continued to retreat which has supported losses for four consecutive sessions on the front month, which settled at £136.50/MWh yesterday, down £20.25/MWh over five days.EUA carbon contracts reached their largest daily increase in a month yesterday, despite energy prices easing alongside mild weather and robust wind generation. Strong trading activity pushed the spot contract up €4.41 to settle at €86.33 a tonne.
Once again momentum in global oil markets take direction from China
Once again momentum in global oil markets take direction from China, as the countries reopening supports demand expectations. Brent crude front month peaked at $88.01 yesterday before ending the session at $87.47 a barrel up $1.34 on the day. Additional support came arose from the US, where the latest GDP data increased at a rate of 2.9%. Brent crude has started the year strong, as the front month contract has averaged at $83.67 a barrel since the start of 2023, however during the same period last year it averaged at $85.90 a barrel. All eyes will be on the next OPEC+ announcement, which will give an overview of the cartels forecast output levels. If output productions remain tight, prices may react positively.
Pressure has continued to ease in the UK gas market
Pressure has continued to ease in the UK gas market this morning, as prices drift lower. The front month contract February last traded at 136.48p per therm, down 2.74p while the front quarter is down 3.82p at 138.25 pence. The Day ahead contract has also started the day in negative territory, last trading at 135.00p, 7.05p down. While the Within day product is yet to trade. The UK gas system has opened 11MCM undersupplied with demand forecast at 331MCM. Bullish momentum is evident once again in the carbon market, as the Dec 23 contact has hit €90.00 a tonne.