December, the new front month for the NBP posted a loss of 1.38p per therm on the day, bringing the decline for the week to 7.88p

Gas Market

NBP futures opened softer on Thursday and losses were extended through to the afternoon but a late tick up in prices limited the decline on the day.  The new front month, December, traded to a low of 101.21p per therm before settling at 103.36p, posting a loss of 1.38p day-on-day.  The contract is down 7.88p this week after Israel’s retaliation on Iran last weekend did not target oil or energy infrastructure. Further out, contracts past next summer ended the session slightly higher.  Milder temperatures along with above average wind generation have tempered gas demand in the UK and northern Europe and this is expected to run into next week. Prompt prices softened as a result and the Spot and Day ahead yielded 1.45p yesterday.  

Power Market

GB baseload futures showed weakness on Thursday and contracts at the front of the curve followed their counterparts on the NBP curve lower. The front month, November, expired at £89.00/MWh declining by £2.63/MWh on the day. December will take up the front month roll from Friday and settled £1.60/MWh lower.  Another drop in carbon EUAs added to the downside as the Dec-25 contract eased by €1.86 per tonne. Prompt prices softened in line with declines on the NBP prompt and baseload for the Day ahead gave up £1.52/MWh to settle at £91.35/MWh. Wind generation is forecast at around 7.0GW for Friday and although down on Thursday’s levels is above the average for the last week.  

Oil Market

Positive economic data from China propped up crude oil prices on Thursday as Brent for November settled 61 cents up at $73.16 a barrel.  The January contract will assume front month status from Friday and added 65 cents to close at $72.81 a barrel.  The latest Purchasing Managers Index for China reached 50.1 in October, a value above 50 tends to indicate an expansion and this was the first time in the last six-months the PMI exceeded 50. This may mean the new stimulus package introduced by the government last month to achieve a GDP of 5.0% is starting to show returns and the hope is oil demand will be boosted. Reports of a possible retaliation by Iran came after the market closed on Thursday and crude oil prices rose by around $2.00 a barrel after the settlement for the day.  

Markets this morning

Crude oil prices yielded some of the post settlement gains from last night as Brent for January delivery is $1.52 a barrel up at $74.33.  Prices increased late in the evening following reports suggesting Iran is plotting to attack Israel over the coming days. Closer to home, gas prices have continued to trend lower with near curve months on the NBP down by over 3.00p per therm.  December last exchanged at 100.05p but did open at 98.70p.   On the prompt, premium continues to be unwound and the Day ahead for Monday last traded at 98.70p. The GB gas system is balanced this morning with demand slightly higher at 192mcm.