Natural gas futures on the NBP ended the week with modest gains as near months exchanged above the 70.00p mark for much of the session before retreating late in the session. The front month February traded to high of 72.04p but settled at 69.86p with a gain of 1.44p. The Summer-24 contract also flip flopped around the 70.00p mark before settling 1.75p higher at 70.46p. The gains took the shine off the weekly performance for the near curve as only the front month had more than a 10.00p loss for the five days. The Summer contract ended the week 8.16p lower and weekly losses diminished further out the curve. Prompt prices were mixed on Friday and the Spot and Day ahead products yielded just 0.25p.
Baseload power ticked up on Friday on the back of gains seen in the gas and carbon markets. February settled £1.70/MWh higher at £69.45/MWh, but over the week was £8.05/MWh lower. A little further out, the Summer 24 contract closed at £64.80/MWh with an increase of £2.05/MWh while it moved £5.95/MWh lower over the five-days. With the declines in carbon stalling on Thursday, EUAs edged marginally higher on Friday, with the Dec-24 contract closing at €63.52 per tonne.
There was a significant decline to the Day ahead on Friday on the back of robust forecasts for wind generation. The Day ahead price for Monday settled at £48.56/MWh which was a discount of around 19.1% on the weekend price.
After a choppy session, crude oil prices eased late in the session on Friday but remained marginally higher for the week. Severely cold weather in North America continued to hamper crude oil production at the end of the week and this combined with geopolitical tensions vied with concerns of the health of global economies to support crude oil prices. China’s quarter 4 figures were a disappointment and raised doubts as to a recovery in demand for 2024. The risk to supplies remain with tensions in the Middle East flaring up at the end of the week while in U.S., the active rig count for the last week was down by two. Meanwhile North Dakota’s output may take several weeks to return to full production according to the state regulator. At the close, Brent for March delivery was down 54 cents to $78.56 a barrel.
Markets this morning
The strong wind generation and milder temperatures have seen gas demand fall to 260mcm for today leaving the gas system in balance. On the prompt, the Spot is expected to open around 3.50p lower while the Day ahead product is down over 4.00p. Near futures on the NBP are also trending lower with February well below the 70.00p mark at 65.56p. Further along the curve, the Summer-2024 contract is down 2.66p to 67.80p. Carbon EUA contracts for 2024 and 2025 are around €1.75 per tonne lower this morning while in the crude oil markets, Brent is flat at $78.53 a barrel.