The UK NBP gas market opened firmer yesterday as contract picked up from where they have left off at the close of the previous session. Early gains were more pronounced at the front of the curve where the front month April contract was up by 4.50p per therm and the Summer 2023 contract was priced at 113.90p, up by 3.10p. These gains were maintained for the bulk t of the session with longer dated contracts also experiencing an uplift of between 3.00p and 4.00p. Late on the marker preformed a volte face with contract going into negative territory ion the final hour of the market. The April contract displayed a spread of 8.60p between the high and low as it finally settled at 106.85p per therm, down by 1.90p/therm. Summer 2023 finished at 109.34p down by 1.46p.
GB baseload power contract at the front of the curve posted some minor losses on lower fuel input costs. Both the front month and May contracts shed £1.30 and £3.35 respectively as plentiful wind generation gave direction. Wind generation levels peaked in excess of 11.9GW as conditions proved favourable. Day ahead baseload also fell with £3.05 of premium coming out of prices. Further out in the curve prices were generally mixed as increasing carbon costs provided some strength. EUA allowances recovered the losses from the previous session and posted gains of between €1.70 and €2.30 per tonne.
Global crude oil markets took a further turn down during trading yesterday as losses were extended for the third session in a row. The spread between the high and low came in at just over a dollar fifty with the high point for the front month contract being established during the early part of the session. The front month Brent crude contract settled at $82.66, down by 63 cents on the day and losses of $3.68 in the last three sessions. the pressure on crude oil markets is coming from various sources chiel among them being less optimism about Chinese economic recovery and the ongoing strength of the dollar. Typically, a stronger dollar weighs on the price of crude as it becomes more expensive for holders of other currencies.
Markets this morning
The UK gas market has opened weaker once again this morning with all contracts that have traded thus far posting losses of between 3.00p and 4.00p per therm. Wintery weather continues to extend its reach across the UK and Ireland, but the market is so far ignoring this development. On the gas prompt the spot has declined 14.00p to 107.00p per therm while day ahead gas is down by 4.50p at 109.00p per therm. The UK gas system is well balanced this morning with supply and demand equally matched at 290MCM. Wind generation continues to be robust, and this is dampening overall demand. Crude oil markets are flat to last night’s close.