The small rebound in NBP futures on Thursday was overshadowed on Friday as bearish fundamentals returned with forecasts for mild temperatures and strong wind generation. The April contract ticked up by 2.89p on Thursday but fell by over 5.00p on Friday bringing the week’s decline to 29.59p. The summer contract yielded 4.67p on the day and like the front month was down 27.05p for the week. On the prompt, early losses held up over the session as the spot closed 3.00p lower at 101.05p while the day ahead settled below the 100.00p mark for the first time since mid-November. UK ports are expected to receive 8 laden LNG cargoes over the week which also added to slide in gas prices.
The GB power curve returned to declines on Friday with pressure from the NBP curve countering support from gains in the carbon market. The front month, April, settled £7.00/MWh down at £108.75/MWh, while over the week the contract shed £29.60/MWh. The summer contract settled at £116.90, declining by £5.20/MWh on the day. Wind generation is forecast at around 8.5GW for Monday but is expected to rise over the week which should pressure prompt prices. Carbon EUAs rose on Friday with the spot adding 53 cent to close at €85.48 per tonne.
The assurances doled out in the banking sector failed to prop up markets and crude oil prices tracked equity markets lower on Friday. Brent shed $1.73 a barrel on the day but was down by over $3.00 earlier in the session and finished the week $9.81 a barrel lower at $72.97 a barrel. The U.S. benchmark, West Texas Intermediate, settled at $66.74, fell by $1.61 a barrel on the day or 13.0% over the week, which is the largest since last April. Recession worries continued to weigh on prices too after the EU Central Bank increased interest rates by 0.5% last week with the U.S. Fed expected to proceed with a further increase of 0.25% later this week.
Markets this morning
Crude oil prices have tumbled this morning with Brent almost breaking through the $70 a barrel marker having traded down to $70.12 a barrel. The May contract for Brent last traded at $70.80 a barrel, down $2.17 from Friday’s close as the equity markets react to the current banking crisis. In gas, the front of the NBP curve has trade down with April 6.47p lower at 97.50p, while the summer las exchanged at 100.50p, down 8.02p. On the prompt, the spot last traded 9.05p down at 92.00p while the day ahead contract is 6.75p lower at 91.75p.