The energy markets across Europe continued to ease on Thursday with forecast for cooler temperatures expected to reduce cooling demand while restocking storage gas remains ahead of schedule. Meanwhile in the UK, higher wind generation is expected for the next couple of weeks and is likely to dent the demand for gas fired generators. On the NBP, near futures softened from the get-go but there were several forays into positive territory during the session demonstrating the uncertainty still in the market. At the close, August had yielded 3.22p per therm at 70.02p while the Winter-23 contract settled at 123.08p, down 1.53p. Similar losses were recorded across the prompt market with the Spot and Day ahead products closing at 69.75p and 68.50p respectively.
The softening of gas futures on the NBP curve and across Europe weighed on GB baseload futures yesterday. Forecasts for increased wind generation also played a part as the prompt eased on the day. The front month declined by £2.33/MWh to close at £72.68/MWh while further along the curve, the Winter contract recorded a smaller loss, closing at £118.63/MWh. Baseload for the day ahead closed £3.23/MWh down yesterday as the contract settled at £81.17/MWh. In the carbon markets, EUAs out to 2024 recorded minor gains as the Dec-23 contract added 17 cent per tonne to close at €90.92 per tonne while UKAs settled mixed.
After a slight dip on Wednesday, crude oil prices rebounded yesterday with a tightening of supplies and hopes for a revival of the Chinese economy over the back half of the year providing the support. Beijing has pledged to step up stimulus policies to boost the Chinese economy over the next six months in an effort to boost growth levels which have been slower than expected after the pandemic. Supplies of crude oil are expected to tighten next month as Saudia Arabia continues it’s voluntary cut in production of 1 million barrels per day while Russia has reduced exports for June to August, but signalled recently that exports will increase in September. The September contract for Brent settled at $84.24 a barrel, up $1.32.
Markets this morning
The trend of the last two session has continued this morning as NBP near futures and prompt have opened lower. The August contract on its final day as front month on ICE is down 5.02p to 65.00p while the front season has shed over 4.00p in early trading to last trade at 118.95p. On the prompt, the Spot is down 5.75p to 64.00p with the day ahead a little sluggish and is still to get going. The GB gas system is comfortable with supplies 6mcm long against today’s demand of 177mcm. The September contract for Brent is down 26 cents to last trade at $83.98 a barrel.