After a volatile opening, NBP futures settled down and traded in a narrow range for the rest of Fridays session as traders awaited more news on the potential strike in LNG facilities in Australia, as ballots opened for workers on Friday for the strike vote. The Troll gas field in Norway is set to have reduced capacity for planned yearly maintenance from 19-25 August, with an anticipated 34.5 mcm/day offline over the whole period. The front month September contract traded as high as 96.4 pence per therm in early trading before settling down 2.05p over the session at 90.89p. Contracts further out the curve settled marginally higher day on day. When we look at the week as a whole the Winter-23 contract bore most of the upward pressure, up 8.79 over the five days. On the prompt, despite the UK gas system being oversupplied on Friday, the Within day and Day ahead contracts settled 4.00p higher.
Bullish movements in both NBP gas and UKA carbon futures supported GB baseload prices on Friday. While the front month September contract settled marginally lower mirroring the NBP gas market, further out the curve pushed higher with the Winter-23 contract settling £2.15/MWh higher at £127.00/MWh. Despite the increase in NBP gas and UKA carbon futures, EUA carbon markets closed lower on Friday after German EUA auction results were poor. The EUA Dec-23 contract settled 80 cent lower at €87.90 a tonne.
Crude oil contracts pushed higher on Friday on signs of slowing U.S output, but both Brent crude and WTI posted a weekly decline for the first time in eight weeks on mounting concerns about global demand growth. Industry data showed that the U.S. oil and natural gas rig count, an early indicator of future output, fell for the sixth week in a row. However, crude oil prices dropped around 2% from last week, as a worsening property crisis in China added to concerns about the country’s sluggish economic recovery and reduced investors appetite for risk across markets. There is also concern mounting that the U.S. Federal Reserve has not finished increasing interest rates to tackle inflation. Higher borrowing costs can impede economic growth and in turn reduce overall demand for oil. The Brent front month October settled at $84.80 a barrel, up 68 cents on Friday.
Markets this morning
NBP futures have extended gains this morning after unions at Woodside Energy Group’s North-West Shelf offshore gas platforms on Sunday announced plans to strike as early as September 2nd
, which could disrupt shipments of LNG from top exporter Australia. The front month September traded as high as 102.77 pence per therm but has retraced from its highs and is currently trading at 97.96p, up 7.07p on the session, while further out the curve, the Winter-23 contract is trading just over 3.00p above its closing price on Friday. On the prompt, the Day-ahead contract is currently up 6.95 pence per therm on the session. Brent crude oil has opened bullish this morning, up 32 cents a barrel so far on the day.