Near months of the NBP are over 5.00p lower this morning

27 November 2023

Gas Market

After two successive sessions of gains the NBP futures market was directionless on Friday and settled marginally lower.  Temperatures are expected to drop this week while wind generation is forecast to fall below recent daily averages.  December, the current front month for the NBP curve, settled flat at 119.79p on Friday but was up 6.05p week-on-week.  The Summer-24 contract declined by 1.10p to 116.59p on the day which left the contract just under a penny up for the five days. Prompt prices shrugged off the forecasts for cooler weather and settled with minor losses as the GB gas system was buoyed by high imports from Norway.

Power Market

The lack of clear direction in the NBP futures market fed into the baseload curve of Friday as contracts settled mixed on the day.  The previous two session of gains left the front month £6.25/MWh higher for the week as the contract settled at £102.75/MWh, down £0.75/MWh on Friday.  There was a significant increase to the Day ahead contract with forecasts for wind generation to fall below recent averages. The contract gained £33.09/MWh to settle at £111.54/MWh.  There was limited movement in the carbon EUA market as contracts eased by an average of 0.1% as the Dec-24 product closed at €80.20 per tonne.

Oil Market

There was a further decline in crude oil prices on Friday as Brent shed 84 cents to close at $80.58 a barrel.  It was the third session of gains in a row for the global benchmark as the market sets its eyes to the OPEC+ meeting later this week.  When the meeting was delayed from Sunday there were rumblings that there was disharmony within the group as not all nations were behind a further drop in production. It’s widely expected that an extension to the current production cuts may be the compromise that will be reached.  Geopolitical risk and threat to oil supplies in the Middle East was reduced with the release of the first hostages in Gaza and hopes the ceasefire could be extended.

Markets this morning

The GB gas system has responded well to the higher demand today and is forecast 21mcm long by the National Grid. Wind generation has dropped off leaving gas fired generators to take up the slack in the power stack while heating demand is expected to pick up later in the week.  Prompt prices have eased as a result of the systems comfort with the Spot down 5.55p in early trading.  Near months are also over 5.00p lower with December last exchanging hands at 114.15p.  In the crude oil markets, Brent has yielded $1.13 a barrel to trade below the $80 a barrel marker ahead of the OPEC+ meeting later in the week. Find out more about our Commercial Energy Services.