NBP futures settled mixed on Friday after reports that China received its first LNG delivery from Russia’s Arctic LNG2

Gas Market  

With the September contract expiring on ICE on Thursday, October, the first of the winter months took on front month status for the NBP on Friday. The market opened lower following reports of the first deliveries of LNG from Russia’s the Arctic LNG2, but declines were reversed not long after and near months flipped between gains and losses before settling marginally lower. If China agrees further deliveries of LNG from Russia this would leave more LNG for Europe and the west which could pressure wholesale gas prices.  The market also weighed in the possibility that the U.S. could apply sanctions on buyers of LNG from Arctic LNG2. At the close October was 0.12p per therm down at 77.83p while the Winter-25 contract finished 0.29p higher at 84.34p. Weak demand and strong wind generation forecasts weighed on the prompt on Friday.

Power Market

GB baseload power futures settled a touch higher on Friday save for the October and November contracts. The curve tracked movement on the NBP futures market while increases to carbon provided some late support. The September contract expired at £75.23/MWh, up £0.10/MWh day-on-day but was down £1.88/MWh for the week. The more actively traded October contract closed flat but moved £2.78/MWh lower over the week. Robust forecasts for wind generation weighed heavily on the Day ahead product on Friday. The contract settled 39.4% or £31.54/MWh down from Friday’s price. Carbon EUAs settled at a three-week high with the Spot closing at €72.38, up €1.00 per tonne.

Oil Market

Brent settled higher for the second week in a row although Friday’s loss of 50 cent a barrel eroded the lion’s share of the weeks gain. As the U.S. driving season draws to an end, demand in the world’s largest consuming nation is expected to contract all while OPEC+ increases output. The group have agreed to increase production by 547,000 barrel per day during September and this is on the back of previous monthly increases in attempts to unwind their voluntary production cuts.  This could leave global supplies with a large surplus in the final quarter of the year and exert pressure on crude oil prices.  The October contract for Brent expired at $68.12 a barrel on Friday while the November contract settled at $67.48 a barrel.

Markets This Morning

The markets have opened firmer this morning with near futures recovering some of the losses from the latter half of last week.  October, the front month for the NBP, last traded a penny up at 78.83p per therm while the Winter contract is 1.16p higher at 85.50p. Gas demand remains well down on seasonal norms at 85mcm this morning and supplies are forecast long.  We would expect to see prompt prices open softer, however, the gain on the near curve is likely to provide support.  Crude oil prices have ticked up with Brent 71 cents a barrel higher at $68.19 a barrel and Carbon EUAs are also climbing higher with contracts for Dec-25 and Dec-26 adding around 70 cent per tonne in early trading.