Following the large declines exhibited on the NBP on Tuesday, contracts corrected upwards yesterday, with near months averaging increases of 1.91p per therm.

Gas Market

A portion of Tuesday’s losses were retraced on Wednesday with contracts across the NBP all edging up. The gains may have been somewhat of a market correction, while U.S. LNG supply risk due to Hurricane Francine as well as crude oil increases also fed into the upside on the curve. The NBP front month posted a 2.73p gain to end the session at 87.31p per therm. Cooler temperatures for the rest of the week as well as lower than expected wind levels supported prompt contracts with Day ahead increasing by 2.95p day-on-day to close at 87.95p per therm. Gains on the Spot were more muted as the GB system was well supplied throughout much of the day and the presence of renewables in the power stack was strong at 50%. Within day increased by 0.25p to close at 85.50p per therm.  

Power Market

GB baseload power contracts tracked the upwards movement experienced by the NBP on Wednesday with near months gaining an average of £1.10/MWh on the previous close. Movement was more volatile on the prompt as revised forecasts suggested well below normal temperatures for the rest of the week and lower than expected wind levels for the following week. The Day ahead contract increased by £29.47/MWh to end the day at £78.65/MWh. The EUA allowances market tracked the gains across gas and power markets on Wednesday while UKAs made modest losses. Dec-24 EUAs gained €1.08 a tonne to close at €66.32 a tonne while the UKA equivalent shed just £0.03 a tonne to finish the day at £42.35 a tonne.   Oil Market Crude oil markets were supported by concerns over Hurricane Francine’s impact on oil output in the U.S. Upside was limited due to concerns around weak economic indicators from China and the U.S. as front month Brent settled at $70.61 a barrel, up $1.42, but down 15% month-on-month Crude oil prices were supported on Wednesday by concerns over Hurricane Francine’s impact on oil output in the U.S., the world’s largest crude producer. Approximately 24% of crude oil production and 26% of natural gas output was offline as the hurricane made its way along the Gulf of Mexico, prompting some modest supply risk. Gains were capped however by concerns over future demand levels from China and the U.S. which have been exacerbated of late by a spate of weak economic indicators which have underpinned the losses seen across crude oil markets. Front month Brent increased by $1.42 to settled at $70.61 a barrel, down almost 15% month-on-month despite the day-on-day gain. WTI for October-24 delivery followed a similar trend, increasing by $1.56 day-on-day to close at $67.31 a barrel.     Markets this morning NBP curve prices are back in decline this morning with all traded contracts currently below their previous close. October-24 last went through at 85.51p per therm, a loss of 1.80p day-on-day so far. Although muted wind levels are feeding into higher gas-for-power demand the GB system is so far well-supplied today. Day ahead has fallen by 2.20p on Wednesday’s close to last trade at 85.75p per therm. In contrast, crude oil prices have maintained yesterday’s trend, continuing to edge up on fears over Hurricane Francine’s impact on U.S. oil output. Front month Brent last went through at $71.56 a barrel, up just under a dollar on Wednesday’s close.