Prompt prices have reversed yesterday’s gains

NBP prompt edged 4.50p higher on average

The GB gas system ran short on Wednesday and provided support to prompt prices on the day which also fed into near curve futures.  The system was still looking shy at the close of trading and for the first time in over a week the early gains were extended as the March contract settled 7.66p higher to close at 137.25p.  Futures past the summer recorded more modest increases with the winter just adding 3.28p to settle at 161.46p.  NBP prompt edged 4.50p higher on average with the day ahead for February averaging 135.42p for the month so far, which still compares favourably with the Dutch TTF equivalent.  Longer term contracts may come under pressure after the Dutch gas operator confirmed plans for an increase in LNG reserves by up to 12% by the end of the year and by 25% in total by 2025.

 GB baseload power curve tracked the NBP futures curve higher

The GB baseload power curve tracked the NBP futures curve higher yesterday while increases in carbon also added to the gains on the day.  At the close, the March contract recorded a £5.00/MWh gain to close at £143.00/MWh.  Longer curve contracts were around 1.0% higher at the end of play with winter adding £1.63/MWh to close at £166.00/MWh. Baseload for the day ahead settled £3.77/MWh up yesterday, with the gains on the NBP prompt adding to forecasts for a decrease in wind generation.  The renewable resource has contributed almost 10.0GW on average for the last week but is forecast to fall to the end of February.

  Crude oil prices continued to ease on Wednesday

Crude oil prices continued to ease on Wednesday but losses on the day were tempered by latest report from the International Energy Agency.  The report from the Paris based agency forecasts the supply of oil will exceed demand in the first half of 2023 but will tighten in the second half.  It shows demand rising by 2.0m barrels per day in 2023 with China accounting for almost 50% of that increase.  Earlier in the week, OPEC+ increased its forecast for 2023 oil growth to 2.3m barrels per day.  U.S. crude oil reserves jumped higher over the week which weighed on prices yesterday, but a one-off adjustment was the main reason for the 16.3m barrel increase.  Brent for April delivery settled at $85.38 a barrel down 20 cents.

 Near curve contracts on the NBP have opened softer

GB gas demand has dropped to 276MCM for today and the National Grid is forecasting supplies over 10MCM long.  Prompt prices have reversed yesterday’s gains with the spot at 130.00p and the day ahead last trading at 131.50p.  Near curve contracts on the NBP have opened softer too with March down 5.20p to 132.05p while the summer has not traded the bid and ask spreads suggest the contract should open over 3.50p lower. The April contract for Brent is currently exchanging at $84.96 which is down 42 cents a barrel from yesterday’s close.  

Find out more about our Commercial Energy Services