After a choppy session, NBP futures settled marginally higher on Wednesday as the market rallied late in response to gains in European gas prices. Temperatures for Northern Europe have been revised to 2-3°C below the norm for next week, which will raise gas for heating demand and possibly increase exports through the IUK to the continent. After an initial rise in prices near futures quickly retreated and traded in negative territory for much of the session as December hit at a low of 109.40p before going on to settle at 113.05p, posting a gain of 1.23p. The summer-24 contract settled at 113.41p traded in a range of 110.31p to 115.00p. Prompt prices settled lower save for the Spot which added 2.25p on the day on a tight gas system.
GB baseload futures settled higher yesterday with late support arriving from a rally in futures on the NBP. December settled £2.15/MWh higher at £98.75/MWh yesterday, while gains further along the curve were more modest. Carbon EUAs closed marginally lower as the Spot settled at €74.86 per tonne, the lowest settlement for the contract since mid-January. Wind generation is forecast above 19.0GW on Thursday before easing going into the weekend. As a result of the expected healthy supply margins, baseload for the Day ahead shed £18.68/MWh yesterday.
As the market prepared for the Thanksgiving break in the U.S., prices for both benchmarks settled lower on Wednesday. The main driver of the day came via the weekly inventory report from the Energy Information Administration. The headline to take away from the report was the build of 8.7m barrels of crude oil over the last week while gasoline and distillate stocks were down by less than 2m barrels. Meanwhile production in Venezuela has started to ramp up as the country prepares to recommence exports following the relaxing of sanctions by the U.S. Any hopes for price support seems to hang on the meeting with OPEC+ members which has been put back to Thursday next week and whether the group can agree to deepen or extend production cuts from January.
Markets this morning
Prompt prices have reacted to a short gas system this morning as the Spot added 1.75p in early trading. The gas system is forecast 13mcm shy by the National Grid while demand is curbed to 221mcm by strong wind generation. The increases on the prompt have spilled into the front curve months with December last exchanging at 151.21p which is 2.16p above last nights close. The Thanksgiving holiday in the U.S. will limit activity in the crude oil markets today, however, Brent has lost a dollar over the morning and is down to $80.95 a barrel.
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