Thursday’s gains continued into Friday with the biggest NBP increases observed across the prompt and near curve

Gas Market

Forecasts for lower temperatures, high gas-for-power demand levels and an undersupplied system all conspired to drive up the Spot and prompt contracts on Friday, with the upside feeding into gains on the near curve as well. While high cloud cover continued to constrain solar output and low winds limit wind production, gas demand from the power sector remains robust. The Day ahead product increased by 3.35p day-on-day to close the session at 106.90p per therm. Lower day-on-day withdrawals from gas and LNG storage facilities contributed to the Spot gains, with Within day increasing by 3.10p to settle at 107.15p per therm. The front-month contract gained 3.09p on the previous close to end the week at 107.41p per therm.    

Power Market

GB Baseload curve prices increased in line with gains across the NBP gas market on Friday. The biggest gains were seen on the near curve, with the front month contract increasing by £3.38/MWh to close the week at £90.00/MWh. Further out, gains were more muted, with the Winter-25 contract posting a £0.15/MWh gain to settle at £84.50/MWh. In contrast, the Day ahead contract moved down, closing at £94.75/MWh, a decline of £1.75/MWh day-on-day. Thursday afternoon’s rally continued into Friday, with European carbon prices experiencing gains amid increased buying activity and prospects of cooler temperatures across Europe. The Dec-24 contract increased by €1.42 to close the week at €67.67 a tonne.  

Oil Market

Receding fears over the impact of Hurricane Rafael on oil and gas infrastructure along the U.S. Gulf coast weighed on oil prices on Friday. The hurricane is expected to weaken and move slowly away from Gulf coast oilfields over the coming days, according to the U.S. National Hurricane Centre. Downward pressure was also offered by weak economic signals once again coming from China, the world’s largest oil importer. Data released late last week has shown that crude oil imports in China have declined year-on-year for the sixth consecutive month. Although a fresh round of fiscal support measures released on Friday may have limited losses. Front month Brent closed the week at $73.87 a barrel, down $1.76 day-on-day.    

Markets this morning

Friday’s upside on near curve products has continued into Monday, with the December-24 and January-25 contracts up by 1.79p and 1.40p per therm respectively. Although the Spot market has yet to trade, the Day head contract is also up on Friday’s close, having last gone through at 108.75p per therm. The GB system is this morning oversupplied, despite higher day-on-day temperature driven demand and lower LNG sendout. Gas-for-power demand is also up, with wind speeds expected to remain low for the remainder of the week. Crude oil markets are steady with fundamentals unchanged on Friday. Front month Brent is down just 69 cents on its previous close, having last gone through at $73.18 a barrel.