NBP futures had a mixed day on Wednesday, with most of the curve failing to hang on to the premium gained late in Tuesdays session. The news of the extension to the maintenance at the Troll field caused a late rally on Tuesday and a volatile open on Wednesday. The front month October extended gains and traded as high as 100.55 pence per therm, eventually settling at 95.37p, an increase of 1.78p day on day. October was the only contract to finish in positive territory on the day, with Winter-23 settling down 1.55p at 120.94p. On the prompt, the Day-ahead and Within-day were buoyed by the news of an extended ramp up period in the Troll field and colder weather and lower wind speeds in the UK, settling up by an average of 1.54p.
GB baseload contracts tracked the gas market on Wednesday, with most of the curve shedding the premium gained on Tuesday bar the front month October contract. The UKA Dec-23 fell by 3.5% day on day adding further pressure to the far curve. October settled £2.50/MWh higher at £87.00/MWh while the biggest decline was seen in the Summer 24 contract which settled down £.2.50/MWh at £105/MWh. EUA carbon rebounded strongly amid the release of the Commitment of Traders data with Investment Funds increasing their net short positions after the September option expiry. The late rally saw the EUA Dec-23 contract settle up €1.27 at €82.67.
Global oil prices eased from recent yearly highs on Wednesday after the U.S federal reserve left interest rates unchanged as widely expected but stiffened its hawkish stance with a further rate increase projected by the end of the year. Fed policy makers still see the central bank’s benchmark overnight interest rate peaking in the 5.50%-5.75% range, a quarter of a percentage point above the current range. A rate increase could dampen economic growth and overall fuel demand. There was little reaction in the market to the weekly U.S energy data as crude inventories fell in line with expectations. Crude inventories fell by 2.1 million barrels last week compared with expectations for a 2.2-million-barrel drop. The Brent front month November contract settled at $93.53 a barrel, down 81 cents from Tuesday’s settlement price.
Markets this morning
NBP futures took a further step lower this morning in early trading. The front month October contract has the smallest decline, down 1.07 pence per therm, while the Jan-24 contract is currently trading 2.91p below Wednesday’s closing price. The UK gas system has opened undersupplied by 26/mcm/d with temperatures dropping close to seasonal normal levels today despite this the Day-ahead and Within day contracts have opened on average 2.04p lower. Brent has opened weaker in early trading, currently $1.19 below last night’s close as the market processes the prospect of another interest increase before the end of the year.