Another choppy session on the NBP on Friday resulted in losses across the prompt and near curve, although direction was more mixed further out

Gas Market

Another choppy session on the NBP curve on Friday ultimately resulted in most contracts finishing below their previous close. March-25 settled at 112.33p per therm, a loss of 1.22p day-on-day and down just under 10p week-on-week. The near months continued to fall on expectations that the war between Russia and Ukraine could end soon, potentially resulting in increased availability of gas supply sources into Europe. The recent onslaught of LNG cargoes arriving into the U.K. has also tempered supply fears. Mild temperatures for this week outweighed support from weaker wind output forecasts, which pressured the prompt market down. The Day ahead contract fell by 2.45p day-on-day to finish out the week at 110.25p per therm, its lowest close since mid-December.  

Power Market

Near curve GB Baseload contracts tracked losses across the NBP gas market on Friday, while movement was more mixed further out. The biggest loss was seen on the April-25 contract which posted a £1.75/MWh loss to close out the week at £88.15/MWh. A downward revision to wind power output for this week as well as an unplanned outage at the Seabank gas fired plant supported the prompt with Day ahead gaining £0.59/MWh day-on-day. Increased buying activity drove up European carbon prices on Friday as traders scrambled to cover short positions after the recent steep declines. The Spot EUA contract increased by €1.29 to finsihed the week at €72.14 a tonne.  

Oil Market

A rise in U.S. crude oil stockpiles as well as easing geopolitical concerns pressured oil prices down on Friday, although disruptions to Kazakh oil supply limited losses. Risk premium associated with the Middle East has faded as the Gaza ceasefire holds while the market remains cagey regarding the potential peace deal in Ukraine. Oil flows via the Caspian Pipeline Consortium (CPC), a major route for crude oil exports from Kazakhstan, were reduced by 30-40% on Tuesday after a Ukrainian drone attack. However, oil flows from Kazakhstan’s Tengiz oil field via CPC were uninterrupted. The front month Brent contract fell by $2.05 to finish the week at $74.43 a barrel, down 6.1% month on month.    

Markets this morning

Friday’s downside has continued into this morning with NBP near months all trading below their previous close so far. The March-25 contract last transacted at 109.69p per therm, down 2.64p day-on-day. The GB system is well supplied this morning despite a rise in demand from the power sector, while mild temperatures are mitigating domestic demand levels. Prompt activity is quiet with no trades going through for Within day or Day ahead yet. Crude oil prices are flat this morning as the market continues to await clarity on talks to end the Russia-Ukraine conflict. Front month Brent last went through at $74.36, down just 7 cents day-on-day.