NBP futures continued to add premium on Friday as hopes of an early resolution to the Russia Ukraine war faded

Gas Market

With optimism for a peace deal between Russia and Ukraine fading wholesale natural gas futures continued to creep up on Friday. Early trading for the NBP curve was boosted by the fact that Monday is a bank holiday in the UK while a revision to the Autumn maintenance schedule by Gassco provided support to the Week ahead and Balance of month products. The front month for the NBP added 1.20p per therm on Friday amid heavy trading ahead of the contract’s expiry on Thursday. This gain brought the increase for the week to 7.22p for September. Gains for the near seasonal contracts were modest on Friday but over the five-days the Winter-25 and Summer-25 added 5.59p and 4.08p respectively. On the prompt, the Spot and Day ahead were little moved on the day while the Week ahead and Balance of month settled over a penny higher.

Power Market

The front month for the GB baseload curve closed £1.15/MWh higher on Friday as traders looked to close positions ahead of the UK bank holiday. Gains to contracts further along the curve were more muted with Winter-25 adding £0.48/MWh while the Summer-25 product was just £0.05/MWh higher.  Baseload for the Day ahead fell by 8.5% with forecasts for wind generation set to improve over the week ahead. Carbon EUAs settled marginally lower on Friday but still managed to post a weekly gain of 2.6%. There was early support for European allowances on Friday with an auction in Germany supporting prices, however, prices eased later leaving the Spot down 34 cent to €71.74 a tonne.

Oil Market

The uncertainty around the future of the peace talks between Russia and Ukraine left the crude oil markets flat on Friday. With both sides continuing to target the other’s energy infrastructure risk premium has increased over the week with Brent moving $1.88 a barrel higher. Mr Putin wants Ukraine to surrender all of the Eastern Donbas region among other demands which are unacceptable to President Zelensky. President Trump is still hoping to get both leaders to the table to broker a peace deal but recent posts from Donald Trump have seemed a little down-beat and he seems resigned to accept the fact that this could be a long, drawn-out process. The October contract for Brent settled at $67.73 a barrel with a 6 cent a barrel increase.

Markets This Morning

The UK gas markets are closed today due to the bank holiday. Crude oil prices are edging higher with expectations of further sanctions being applied to Russian energy exports or their buyers as peace talks appear to have stalled.  Meanwhile the conflict continued over the weekend with Ukraine targeting Russia’s nuclear fleet and igniting a fire at the Ust-Luga fuel export terminal. The October contract for Brent is 17 cents up at $67.90 a barrel.  European carbon allowances have opened lower although trading has been thin.  Latest trades for Dec-26 are around 40 cent per tonne below Friday’s close.