Gas Market
After a brief interlude trading above the previous close, the NBP near curve settled into negative territory for much of the day on Friday. The December 25 contract, now trading as the new front month, shed 0.62p day-on-day to close at 80.87p per therm. A strong LNG arrivals schedule for the coming weeks alongside expected injections into storage pointed to robust supplies ahead, which fed into the weakness on the near curve. With warm and windy conditions forecast to return this week, there was little to support the prompt market, with strong pipeline supplies from Norway providing additional downside. The Day ahead contract shed 0.85p day-on-day to close out the week at 73.15p per therm.
Power Market
GB Baseload futures contracts followed the downward direction of the NBP gas market on Friday, with the near months averaging losses of £0.34/MWh. Further out, losses were more muted, with the Summer 26 contract shedding just £0.05/MWh day-on-day. On the prompt, the Day ahead contract posted a modest incline of £0.80/MWh, with forecasts of high winds and above average temperatures hampering any further gains.
European carbon prices were rangebound on Friday in what was a muted day in terms of trade activity. European Allowances for December 25 edged down by just €0.11 to end the week at €78.49 a tonne. UK Allowances, in contrast displayed day-on-day gains, with the December 25 contract increasing by £0.51 to close at £56.51 a tonne.
Oil Market
Crude oil prices were flat on Friday, but still managed to edge a week-on-week decline of 1.3% on ongoing oversupply concerns. Despite the sense of renewed economic optimism, given the recent trade agreements between the United States and China and the United States and South Korea, markets still focused on rising supply levels from major global oil producers. It was reported last week that Saudi Arabia, the world’s biggest oil exporter, had hit a six-month exporting high and was also set to reduce its December crude price for Asian buyers to multi-month lows. The front month Brent contract for December delivery ended the week at $65.07 a barrel, up just 7 cents day-on-day. Meanwhile, the front month WTI contract gained 41 cents by the close to settle at $60.98 a barrel.
Markets this morning
After two consecutive days of decline, NBP contracts are back in positive territory this morning, with the front month contract last going through at a 1.35p premium to its previous close. A downward revision to wind generation levels over the weekend has driven up gas-for-power demand levels, pointing to a tighter balance that is supporting the prompt. Although ongoing strong LNG sendout should limit the upside. The Day ahead contract last went through at 74.15p per therm, up 1.00p day-on-day. Crude oil markets are once again flat after OPEC+ decided to hold off production hikes in the first quarter of next year, stemming oversupply fears. The front month contract last went through at $64.66 a barrel.
