NBP futures increased on Thursday as near months averaged gains of 2.22p per therm

Gas Market

 After a brief respite on Wednesday natural gas futures firmed yesterday with near months averaging gains of 2.22p per therm.  The Summer-25 contract added 2.51p in response to gains across European markets as concerns of tightness of supplies for next summer grew.  An unplanned outage at Oseberg pushed up prompt prices in the Netherlands and this along with forecasts for cooler temperatures and low wind generation propped up the NBP prompt yesterday. While temperatures are expected to fall from the weekend, they are forecast to come in line with the seasonal norms, however, the increased heating demand is expected to pressure supplies next week. The Spot and Day ahead settled around 2.00p higher yesterday while the balance of month kept pace with the front month and added 2.30p to close at 104.05p.  

Power Market

Increases in carbon combined with firmer natural gas futures to boost GB baseload futures on Thursday. The December contract added £1.53/MWh yesterday but much like the NBP curve it was the contracts covering next summer that posted the greatest gains on the day. The Summer-25 contract settled £1.83/MWh up at £76.20/MWh.  A slight increase in wind speeds for Friday countered the upward support from the NBP prompt yesterday and the Day ahead product eased by almost £4.00/MWh. Carbon EUAs posted the largest one-day gain in two-weeks yesterday as the Spot for EUAs added €2.20 to settle at €65.78 per tonne, gains for UKAs were more modest.  

Oil Market

The crude oil markets settled higher yesterday as the markets grappled with news of the U.S. presidential election.  Crude oil prices had traded down by around two dollars a barrel as results of the U.S. presidential election filtered through. Trump in his early acceptance speech said he wanted to look after U.S. oil and speculation began that the POTUS-47 would increase U.S. drilling and could consider reinstating sanctions on Iran and Venezuela to limit exports. Brent went on to settle 71 cents higher at $75.63 a barrel and gains were limited by a strong dollar and falling crude oil imports for October for China.  Production in the Gulf has been cut by around 20% ahead of the arrival of the hurricane Rafael.  

Markets this morning

The threat of hurricane Rafael to oil production in the Gulf of Mexico has receded overnight and crude oil prices have eased in early trading this morning.  Brent for January delivery is down by over a dollar to $74.56 a barrel.  In the gas markets, prices have continued to firm with near futures on the NBP showing gains of between 2.00 – 3.00p per therm as December, the front month, last traded at 107.13p.  The prompt is also demonstrating bullish signs as the Day ahead product is up 2.95p in early exchanges. The GB gas system is forecast 12mcm short against today’s demand of 222mcm.