Limited price movement in the NBP market yesterday

29 June 2023

Gas Market

There was limited price movement in the NBP market yesterday with prices over the whole curve trading in very tight ranges as there was little change in market fundamentals. There are high storage levels for this time of year but LNG sendout has been low recently and the extended maintenance in Norwegian gas fields has limited supply. The market oscillated between gains and losses throughout the day, with the near curve eventually settling lower and further out the curve settling higher. The bellwether Winter-23 contract settled down 1.09p closing at 129.57 pence per therm, while further out the curve the biggest gains were seen in the Summer 26 contract which settled 2.20p higher, closing at 75.65 pence per therm. On the prompt, the market was relatively balanced all day, with the within day settling up 0.95 pence per therm and the Day-ahead contract settling down 2.15 p/therm.

Power Market

There was a mixed day in the GB baseload contracts, with the near curve slightly down on the session tracking the movement of the NBP gas market and further out the curve settling a touch higher, as UKA carbon gained on the day. The benchmark contract Winter 23 lost £2.25/MWh to settle at £126.50/MWh while further out curve we saw gains with the Summer 26 contract settling up £2.50/MWh at £82.00/MWh. GB baseload for day ahead delivery £1.55/MWh higher to settle at £96.50/MWh. EUA carbon contracts moved in the opposite direction to UKA carbon contracts, tracking the bearish TTF gas market with the Dec-23 contract closing at €88.18 a tonne, down €0.82 on the day.

Oil Market

Global oil markets rose by over 2% yesterday as the bigger than forecasted drop in U.S. crude stockpiles offset the concern in the market that further interest rate hikes could slow economic growth and reduce global oil demand. The U.S. Energy information Administration said that crude inventories dropped by 9.6 million barrels in the week ended June 23, compared to the 1.8 million barrel draw that was forecasted and a five year average decrease of 7.8 million barrels. Oil prices rose despite the worries about interest rate hikes after ECB President Lagarde’s comments on Tuesday that stubbornly high inflation will require the bank to avoid declaring an end to hikes. The Brent front month settled up $1.77, closing at $74.03 a barrel and WTI front month closed at % $69.56 a barrel, up $1.86 on the session.

Markets this morning

The UK gas market has opened weaker this morning, as the front month is currently trading down 2.58p, last trading at 82.00 pence per therm while the Winter-23 contract has yet to trade. The UK gas system has opened slightly long by 2.1 mcm. On the prompt, windspeeds are expected to increase, with gas-for-power demand down 18 mcm/d which has led the day-ahead contract to open lower today, currently trading at 81.25 pence per therm, down 3.00p on the session. In the wider energy mix, Brent crude is trading down $0.15 a barrel at $73.88. The benchmark carbon contract Dec-23 is recovering some of yesterday’s losses, last trading €0.39 higher at €88.11 a tonne.  
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