October settled a penny higher having declined by over 10.00p per therm over the first three days of the week

Gas Market

After three days of significant declines the NBP curve settled slightly higher on Thursday after buying activity centered around the front month and season. October shed over 10.00p per therm over the first three days of the week and after settling at a six-week low on Wednesday it was no surprise to see traders taking advantage of the drop in price yesterday.  The front month rallied by over 2.00p before easing late in the session to settle at 86.99p, a penny up while the Winter contract, also heavily traded yesterday, settled just 0.72p higher day-on-day. Norwegian gas imports are still curtailed due to planned maintenance works and the prompt was mixed yesterday.  The Spot and Day ahead products recovered some of the previous day’s losses and after some flip-flopping gains were less than a penny.

Power Market

There was a mixed end to the day for the GB baseload power curve yesterday as near months increased while the longer curve settled marginally lower.  A recovery in natural gas futures on the NBP lifted the front month for the power curve yesterday as October settled £0.63/MWh higher at £73.75/MWh.  The Winter contract added £0.40/MWh while contracts passed the Summer were marked an average of £0.20/MWh down. Wind speeds out turned higher than expected yesterday but are forecast to fall for the weekend before increasing again next week. Baseload for the Day-ahead eased by £3.95/MWh to settle at £75.04/MWh.

Oil Market

A larger than expected draw on U.S. crude oil reserves prevented further declines to crude oil prices yesterday.  The Energy Information Administration released its weekly report on Thursday, a day late due to the Labour Day holiday earlier in the week. The report showed stocks of crude oil had fallen by 6.9m barrels in the week to last Friday, surveys had expected American reserves to decline by closer to 1.5m barrels. With Brent down $4.24 a barrel for the last four days, the global benchmark looks set to post the largest week-on-week loss in over a month.  Earlier support for prices arrived from reports that OPEC+ are to delay production increases scheduled to begin in October however, the weakness in the market continues to stem from demand concerns in China and the U.S.

 Markets this morning

NBP futures have opened with sharp increases this morning with October 3.16p per therm up at 90.15p on the last trade.  The Winter last exchanged at 100.20p with is 2.17p above last night’s close.  Theres no obvious reason for the gains but the strong buying activity for the front month and season has continued on from yesterday. The GB gas system is balanced this morning with increased wind generation supressing gas demand and trading for the prompt has been slow off the mark. Crude oil prices remain steady with Brent 6 cents up at $72.75 a barrel on the last trade.