Natural gas futures for the NBP have continued to edge lower

29 December 2023

Gas Market

Wednesdays gains to NBP futures were reversed and some during Thursday’s trading session. The January contract settled just above its low point of the day at 83.56p, posting a loss of 6.47p.  The contract expired on ICE platform on Thursday along with the Quarter 1-2024 contract which also declined by over 6.00p. Yesterday’s declines left the front months just above the two-year lows reached in the week before Christmas.  Prompt prices also demonstrated weakness yesterday with the Spot and Day ahead products easing by over 3.00p.  The GB gas system overcame an early deficit to end the session with a surplus, however, gas demand was curbed by robust wind generation.

Power Market

The weakness in the NBP futures market weighed on the baseload curve on Thursday.  Near months declined by an average of £3.90/MWh which did not fully undo the gains from the previous session.  The January contract settled at £86.88/MWh, down £3.63/MWh while further along the curve, the Summer-2024 contract closed £2.55/MWh lower at £79.60/MWh.  Carbon prices settled mixed on the day and the Spot price for EUAs closed at €77.13 per tonne. Wind generation slipped below 20.0GW yesterday and is forecast a touch lower for Friday which lent some support to the prompt.  Baseload for the Day ahead settled £6.67/MWh higher but remained £31.37/MWh below the monthly average.

Oil Market

With concerns of disruption to shipping in the Red Sea receding, crude oil prices continued to ease on Thursday.  Brent was down almost $1.50 a barrel halfway through the session and continued to fall into the afternoon.  But prices received a lift later in the session following the latest inventory data from the Energy Information Administration which reported a draw of 7.1m barrels on U.S. crude oil stocks over the previous week.  This was far in excess of what the industry group, American Petroleum Institute, reported on Wednesday and curbed losses on the day. The February contract for Brent expired at $78.39, down $1.26 a barrel while the much more heavily traded March contract shed $2.39 to settle at $77.15 a barrel.

Markets this morning

Natural gas futures for the NBP have continued to edge lower this morning. February, the new front month on ICE, is almost 2.00p lower at 82.66p while the Summer-2024 contract last traded 2.83p down at 81.25p.  Trading on the prompt has been thin, but the Day ahead is a penny up at 78.75p.  The GB gas system is comfortable this morning with demand higher at 235mcm owning to a decline in wind generation.  Brent for March delivery is 60 cents up at $77.75 a barrel.