Recent uptick in the Brent crude market came to an end on Friday

30 January 2023

UK gas market experienced a mixed session on Friday

The UK gas market experienced a mixed session on Friday as prices across the curve opened lower, however near curve contracts struggled to hold onto the downward pressure and ultimately settled marginally higher. The NBP front month contract dipped to a low of 134.00 pence per therm before ending the week up 1.67p at 140.89p per therm. Liquidity was sparse further out as contracts maintained their early losses, Summer 23 shed 0.21p to close at 142.87 pence per therm. The Dutch TTF front month and UK equivalent contract remained tight, with a premium of only 3.09p at Friday’s settlement. Movement in the prompt market was muted, with the Within day and Day ahead contract settling at 141.95p and 143.00p respectively.  

 Modest bounce in prices on Friday

GB baseload future contracts tracked the gas market, with a modest bounce in prices on Friday. However, gains were slightly more pronounced in the power market as it found additional support in spark spreads gaining momentum. The front month contract took the brunt of the upward pressure, settling £5.25/MWh higher at £141.75/MWh while Summer 23 finished at £143.50/MWh, up £1.50/MWh. GB power for day ahead delivery settled at £159.14/MWh on Friday, up fractionally despite an increase in wind production. EUA Dec 23 contract ended the week at €89.25 a tonne down 14 cent on the day but a weekly gain of approximately 5 percent.  

 Losses were also evident in the WTI market

The recent uptick in the Brent crude market came to an end on Friday, with the front month contract ended the week in negative territory. In the opening hours of trading, it looked set to be another day of gains as the contract was trading just shy of the $89 a barrel, however premium began to erode, and the contract settled down 81 cents at $86.66 a barrel.  A cloud remains over the market, as next week’s OPEC+ committee meeting is not anticipated to bring any change in production levels despite China’s economy reopening. Losses were also evident in the WTI market, with the front month shedding 52 cents to end the session at $79.96 a barrel.  

Liquidity is thin further out

The February contract which is set to expire at the end of today’s session has picked up where it left off, up 6.11p at 147.00 pence per therm this morning. The upward sentiment has fed into the March contract also, which is trading over 6.00p higher at 146.50p. Liquidity is thin further out, with only the Winter 23 contract last trading at 175.00p. The UK gas system is 24MCM under supplied with demand forecast at 333MCM. Despite the short system, momentum in the prompt market is muted. EUA Dec 23 contract last traded at €88.50 a tonne, down 75 cent from Friday’s settlement  
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