For the third consecutive session, UK gas prices declined on Thursday, the final day of trading before the Easter holidays. The market’s direction during the opening hours of trading was unclear due to the extremely thin liquidity. Nevertheless, as the day progressed, it became apparent that prices were continuing to retreat, following robust gains earlier in the week. Near curve contracts took the brunt of the downward momentum, with the front month losing 4.33p to settle at 102.31p. Further along the curve losses were marginal. The UK day ahead contract remained at a discount to the TTF, bolstering UK exports via IUK to Belgium and BBL pipeline between the Netherlands and the UK. The Within day and Day ahead contract settled at 102.05p and 100.05 pence per therm respectively.
On Thursday, GB baseload power futures sustained downward momentum for the third consecutive session, as modest selling activity acted as the catalyst for the losses. The front month contract incurred the biggest hit, shedding £3.75/MWh and settling at £106.00/MWh, resulting in a £12.00/MWh loss over the last five days of trading. Losses in the NBP gas market, fed into the Baseload prompt on Thursday, as Baseload for day ahead delivery settled at £85.23/MWh, its lowest level since March 24th. Wind generation supported the downturn, as output was forecast at 20 percent above seasonal norm.
Global oil markets lacked clear direction on Thursday and remained relatively stagnant throughout the session. The interplay between supply and demand fundamentals continued to offset each other as the Brent crude front month contract traded in a narrow range of $84 per barrel over the duration of the week. Despite limited movement on Thursday, the commodity recorded its third weekly gain, primarily due to OPEC+’s curtailment plans. With the oil cartel controlling more than half of the global oil output, any adjustment from the group significantly influences prices. The Brent crude front month settled 13 cents up at $85.12 a barrel while the West Texas Intermediate equivalent ended the session at $80.70, 9 cents higher on the day.
Markets this morning
Momentum is relatively flat this morning in the UK gas market, with the front month last trading at 103.74p, up 1.43 pence per therm while the front season, Winter 23 last traded at 146.54p. Price movement in the prompt market is also muted with limited trading activity. The UK gas system in marginally over supplied which has enabled moderate exports to the Continent once again via the IUK and BBL pipelines. Storage injections are forecast at 29MCM this morning due to the long system. Brent crude front month last traded at $84.68 a barrel, it is a significant week for the commodity as numerous demand and supply updates are due to be released.