Market fundamentals started to show signs of a shift on Friday as NBP futures recorded significant gains in tandem with gains on the Dutch TTF and the German THE markets. Concerns of rising Asian demand and low LNG deliveries to the UK along with news that Norwegian maintenance work is to be extended encouraged more buying on the near term contracts. The July contract settled at 77.76p, gaining 14.37p on the day but over the week has moved 22.81p higher. The winter contract added just over 10.00p to settle at 119.35p. Prompt prices for the NBP were also boosted by a short gas system on the day as the system wrestled to stay on par with the low demand of 137mcm. The spot closed 12.30p up while the day ahead added 14.55p.
The GB power market tracked movement on the NBP and carbon markets on Friday with near months averaging gains of £9.00/MWh. Concerns of rising Asian demand and low LNG deliveries pushed up near months on the NBP and this fed into the power market. Carbon prices also increased on Friday with the EUA spot price closing €2.78 up at €85.07 per tonne. The increases fed into the power prompt too with the day ahead product adding £4.08/MWh to settle at 72.40/MWh. Wind generation if forecast lower for the start f the week barely reaching 3.0GW for Monday.
Crude oil prices continued to slide on Friday with very little changing as demand woes weighed. The OECD figures released earlier in the week confirm the eurozone is in recession while the possibility of further interest rate hikes in the U.S. this week also weighs. U.S. fuel reserves grew last week despite the onset of the summer driving season, meanwhile China’s poor export data for May added to the downside last week all overshadowing the earlier announcement of a production cut from OPEC+. At the close, the August contract for Brent was $1.17 down at $74.79 a barrel, while WTI settled at $70.17, down $1.12 a barrel.
Markets this morning
After Friday’s significant increase in near futures on the NBP the market opened higher with June hitting 79.29p but prices have softened in the last hour. June last traded at 71.97p which is down 5.79p from Friday’s close. The GB gas system is short this morning with supplies 11mcm shy of demand of 138mcm. The prompt has shrugged this off and is in decline too with the day ahead 7.05p lower at 73.00p. Brent has slipped a further $1.74 a barrel in early trading to last trade at $73.05 a barrel.