Thursday’s gains continued into Friday, with products across the NBP prompt and curve exhibiting increases

Gas Market

NBP products across both the prompt and curve made gains on Friday, with the biggest increases observed on short and near-term contracts. Winter-24 settled at 94.59p per therm, an increase of 1.09p day on day, while the front-month contract finished up by 0.95p to close at 73.12p per therm. Despite the gains experienced during both Thursday and Friday’s session contracts were still 2.92p per therm below the 5-day average by the end of the week. Expectations of a heatwave in Japan, one of the top importers of LNG globally, signaled a possible increase in demand for gas from the region, elevating near curve contracts. Recent strength exhibited in crude oil markets also fed into the price support further out. On the prompt, downside from a surplus on the system coupled with high wind output forecasts were outweighed by strength further out. The Day ahead contract finished the day up by 0.60p to settle at 73.50p per therm.

Power Market

Thursday’s gains continued into Friday with the GB Baseload near months increasing by an average of £0.35/MWh day on day but remained well above the five-day average. Gains observed across the NBP gas market provided support across curve products while an upward revision to wind output for the coming days pressured the Weekend contract down. The August-24 contract rose by £0.55/MWh day on day to close at £64.45, while Winter-24 closed up by just £0.05/MWh to finish at £83.25/MWh. EU and UK carbon prices moved in opposing directions on Friday, with EUA’s following gas prices up while UK Allowances posted their largest weekly loss since the start of the year. Dec-24 UKA settled at £41.10/MWh, a loss of £0.48/MWh day on day.    Oil Market Crude oil prices edged lower on Friday, with support stemming from heightened expectations that the U.S Federal Reserve would cut interest rates being outweighed by weaker demand signals from China. Chinese crude oil imports plummeted 11% in June when compared to the previous year. A monthly survey by the University of Michigan showed U.S. consumer sentiment had fallen to a 9-month low in July, adding to hopes of a U.S. interest rate cut which could improve oil demand levels. The September contract for Brent ended the session down 2% week on week, and 37 cents day on day to settle at $85.03 a barrel. The West Texas Intermediate (WTI) August contract ended the session at $82.21 a barrel, a loss of a modest 41 cents on Thursday’s close.

Markets this morning

Having opened this morning’s session above last week’s final close, the front month NBP contract last traded at 72.03p per therm, down over a penny on Friday. Prompt trading is quiet so far. Supply fundamentals remain strong today, with a long system supported by an increase in flows from Norway via the Langeled pipeline and higher winds speeds alleviating demand from the power-generation sector. Crude oil prices are mostly flat on the last close, with downward pressure from weak economic indicators countered by political uncertainty in both the U.S. and the Middle East. Front month Brent is currently trading around $84.91 a barrel, down just 12 cents day on day.