Lower demand weighed on the NBP prompt on Thursday with near months on the curve also shedding premium on day. GB gas demand was around 126mcm yesterday with a similar level forecast for Friday as increased wind generation displaced gas fired generators from the power stack. Prompt prices eased with the comfortable gas system and forecasts for wind to remain above average through the weekend. The Within day product shed 8.95p over the session while the Day ahead closed 6.00p per therm down at 77.50p. The front month declined by 5.24p to 79.25p and contracts past Q4-2023 were directionless on the day with movement confined to under a penny for the most part. Norwegian gas supplies remain curtailed due to maintenance, but the expectations are that the works will be completed on schedule by 15-July.
GB baseload futures tracked movement in the NBP market yesterday providing a similar result as near months eased while contracts past Q4-2023 settled reasonably flat. August posted a loss of £3.45/MWh to settled at £83.75/MWh while the Winter contract closed at £125.25/MWh, down £1.00/MWh. Further along the curve, futures settled within +/- £0.50/MWh of Wednesday’s close. Forecasts for wind generation to remain above average into the weekend pressured the prompt and the Day ahead contract eased by £9.46/MWh to settle at £82.09/MWh. Wind generation is forecast above 7.5GW for Friday.
Tight supplies continued to battle with concerns of slowing global demand on Thursday as the crude oil markets settled flat. The global benchmark, Brent, closed at $76.52, easing by just 13 cents per barrel on the day while West Texas Intermediate, the U.S. benchmark price for crude oil gained 1 cent to settle at $71.80 a barrel. Besides the expected further interest rate increases from the U.S. Fed and ECB, recent surveys have showed a slowing of factory and services activity in China and Europe which have added to fears of a global recession. On the supply side, U.S. crude oil reserves fell by 1.5 million barrels last week according to the weekly inventory report from Energy Information Administration while Saudi Arabia and Russia have committed to reduce production and exports for August.
Markets this morning
Crude oil prices opened stronger this morning, but early gains have been reversed and Brent is currently flat at $76.49 a barrel as the market struggles to find direction. GB gas demand is forecast at 128mcm, and supplies are showing a modest surplus which should offer comfort to prompt traders although no deals have been agreed on the prompt screen as yet. On the NBP curve, August opened firmer rising to 82.82p per therm or 3.57p above yesterday’s close, however, the latest trade for the lead month has gone through at 80.20p. The Winter contract has traded just the once at 134.04p but the bid/ ask spreads are suggesting the contract will move lower on the next trade.