Forecasts for wind generation were increased for the start of the week and combined with ample supplies of LNG pressured the NBP prompt and near futures. The day ahead price shed 3.65p on the day while the balance of month contract settled 6.15p lower. The June contract closed 4.82p down at 75.93p which was almost the same fall in price over the week. The winter contract settled at 134.28p shedding 7.53p over the session to bring the week’s decline to 5.83p amid news that European storage reserves continued to increase over the week. Wind generation for the week ahead is expected to top the seasonal norm and may exceed 10.0GW. GB LNG supplies are to be replenished by up to eight cargoes over the next ten days.
Increases in carbon prices tempered losses to GB baseload futures on Friday. Near curve contracts tracked the declines in the NBP curve lower, but losses to the front months were kept to an average of £3.00/MWh as carbon moved in the opposing direction. While the spot price for EUAs was unmoved at €86.30 per tonne, the Dec-23 contract added 25 cent to close at €88.65 per tonne. Wind generation forecasts for the start of the week ahead remained above 10.0GW and weighed on the prompt. Baseload for Monday was down by around 3.1% or £2.72/MWh to £84.58/MWh.
On Friday we witnessed crude oil prices fall for a third straight day and racking up a fourth week of losses in a row. There was continued uncertainty around the U.S. debt ceiling as the week ended with talks to discuss a solution postponed. There were poor results from China’s consumer price data for April which came in lower than March. Prices didn’t receive support from OPEC’s forecast for 2023 global oil demand which remained unchanged saying that any decline in demand due to economic risks could be offset by growth in China. Brent for July delivery settled at $74.17, down 81 cents while the West Texas Intermediate contract for June settled at $70.04, down 83 cents a barrel.
Markets this morning
There’s very little activity on the NBP prompt market this morning with the market still to awaken from its weekend slumber. The GB gas system is well supplied today with demand falling to 210mcm and the National Grid forecasting the supplies are 14mcm long. The NBP futures market is active and near months opened softer with June hitting a low of 73.89p but latest trades have seen the front month come back a touch and June last traded at 75.19p, however the winter contract is down 10.28p to 124.00p. In the crude oil markets, Brent has ticked up by 15 cents to last exchange at $74.32 a barrel.