Near curve contracts on the NBP tried to push higher
Near curve contracts on the NBP tried to push higher on Monday but failed to gain momentum after opening with modest increases and a late slide saw February and March settle marginally lower. The front months traded up to 8.00p above Friday’s close at stages through the session but it was another failed attempt to add premium as the mild outlook is extended into next month. In the last hour of trading, the front months traded down to the low for the day as support wanned before February settled at 139.81p on its final day as front month on ICE. The GB gas system opened with a significant deficit which barely bothered prompt traders as the spot and day ahead products closed at 141.55p and 138.25p respectively.
Forecasts for higher winds weighed on the prompt
With the NBP futures market settling mixed it was no surprise to see a similar outcome in the GB baseload power market. Contracts settled within +/- £2.30/MWh of Friday’s close with February just £0.25/MWh lower at £141.50/MWh. Carbon prices edged higher on the day, with EUA’s consolidating gains from last week as the spot settled 46 cent up at €86.85 per tonne. Forecasts for higher winds weighed on the prompt as the day ahead product fell by over £32.00/MWh yesterday. Wind generation is expected to get close to 20.0GW on Tuesday, almost 50% of demand.
Crude oil prices eased on Monday
Crude oil prices eased on Monday with the looming interest rate increases on both sides of the Atlantic weighing. The U.S. Fed is expected to deliver another hike in interest rates of around 25 basis points on Wednesday. On Thursday the European Central Bank and the Bank of England are likely to announce a further 50 basis point increase to interest rates. Meanwhile OPEC+ are due to meet this week and all indications are they will leave production output agreements unchanged. Russian oil exports from Baltic ports are expected to be 50% up on December’s level to meet rising demand in China. Brent for March delivery settled $1.76 down at $84.90 a barrel.
NBP futures market has opened higher
The NBP futures market has opened higher this morning and gains have been extended through the first hour of trading with March, the new front month on ICE, up 13.34p at 152.74p. The summer has also opened higher and last traded at 152.00p, an increase of 9.07p on Monday’s close. There are no trades completed on the prompt board as yet and prices are likely to rise as Gassco have reported an unplanned outage at Kollsnes with up to 15MCM of supply impacted. In the crude oil markets, Brent is $1.16 a barrel down at $83.74 a barrel.