The GB gas system remained short on Friday with lower wind generation adding to demand while scheduled maintenance works on Norwegian feeds curbed imports. Prompt prices settled around 2.00p higher, boosted by the tight gas supplies on the day while the balance of month contract settled 2.55p higher at 83.05p. The near months reacted to the bounce on prompt and June, the front month settled at 83.35p, moving 2.84p higher on the day. Earlier in the week the contract had dropped to its lowest level since early January 2022 and after Friday’s gain was 8.41p down week-on-week. Further out, the winter contract settled 1.28p up at 141.39p.
Increases in gas futures on the NBP along with gains to carbon prices propped up the GB baseload curve on Friday. The June contract settled £1.10/MWh higher at £88.85/MWh while the winter contract gained a similar amount to close at £148.45/MWh. The weakness in the carbon markets stalled on Friday with EUAs contracts out to 2025 gaining 50 cent per tonne on average. Wind generation dropped off on Friday but is expected to rise above the seasonal norm for the week ahead. Forecasts are for wind to exceed 7.5GW on Monday and remain around this level for much of the week, pressuring the prompt as the day ahead product settled at £82.00/MWh.
Crude oil prices recovered some of the week’s losses on Friday but closed lower for the third week in succession. Brent settled $2.80 higher at $75.30 a barrel while the U.S. benchmark, West Texas Intermediate, settled at $71.34, up 4.1% or $2.78 a barrel. The global benchmark was down $3.07 a barrel over the week. The interest rate increases on both sides of the Atlantic cooled the market earlier in the week, but it’s expected that both the U.S. Fed and European Central bank will ease back on further interest rate increases. The U.S. jobs data showed a surprise increase for April with 253,000 new jobs created and this added to the market’s belief that the Fed is nearing the end of its current monetary tightening policy.
Markets this morning
The GB gas and power markets are closed due to the bank holiday today, but the carbon and crude oil markets are active. The gas system is showing a small deficit against todays demand of 216mcm, and LNG send out is robust with nominations of 55mcm for today. Latest trades for carbon EUAs for Dec-23 are slightly down at €84.90 per tonne, however, the June contract for Brent has continued to edge higher and last traded at $76.69 a barrel.