NBP futures settled relatively flat

09 August 2023

Gas Market

NBP futures flip flopped between positive and negative territory throughout the day, with most contracts settling relatively flat over the session. European Storage levels are in a healthy position for this time of year at 90%, however there is concern in the market that there could be additional delays to upcoming planned maintenance in Norwegian gas fields. Despite opening weaker and trading as low as 74.52 pence per therm, the front month September contract settled with marginal gains at 78.14p, up 1.65p on the day. There were modest gains across the rest of the curve except for the Summer-24 contract which settled down 0.50p day on day. On the prompt, the within day contract settled down 1.10 p/therm on Tuesday as the UK gas system was oversupplied for the day and the Day ahead contract settled up 0.95p over the session as wind generation forecast was revised down by 0.4GW for the rest of the week but still remains well above seasonal averages.

Power Market

There was limited price movement along the GB baseload curve on Tuesday as both NBP gas and carbon markets traded in tight ranges. The Winter-23 contract settled £0.75/MWh lower at 114.50/MWh while further out the curve Winter 24 and 25 contracts had modest gains. On the prompt, the Day-ahead contract closed £6.37/MWh higher over the session at £80.08/MWh as wind generation forecasts were revised down for that period. The EUA carbon Dec-23 contract traded in a narrow range on Tuesday, between a low of €82.30 a tonne and a high of €84.72/t and settled at €83.98 a tonne as weather signals remain bullish with the latest 14-day forecast revising down the wind output projections for Central Europe.

Oil Market

Brent crude oil edged higher on Tuesday after a positive report was issued by the U.S Energy Information administration (EIA) about the economy, despite trading lower for most of the session after bearish data on China’s crude imports and exports. Both WTI and Brent crude oil contracts were trading down as much as two dollars after Chinas oil imports contracted by 12.4% in July compared to the expected 5% and exports fell by 14.5% compared with a forecasted 12.5%. Prices reversed after a monthly report from the U.S EIA projected gross domestic product to rise by 1.9% in 2023, up from 1.5% in a previous forecast. The Brent front month October contract settled $0.83 higher a barrel at $86.17.

Markets this morning

NBP futures have pushed higher this morning across the curve. The front of the curve is bearing the brunt of the upward pressure, currently trading at 85.00 pence per therm up 6.86p on the session, while further out the curve there has been limited trading. The Winter-23 contract last traded at 119.60p, however the bid ask spread would suggest the next trade will be around the 121.00p mark. On the prompt, both the Within day and Day ahead contracts are trading 8.05p and 6.95p higher respectively despite the UK gas system opening marginally long. Brent crude oil front month October contract has extended gains this morning, currently trading $0.39 higher at $86.56.  
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