NBP gas markets push higher on Friday
UK gas prices ended Friday’s session with marginal gains across the curve, as contracts for 2023 edging 3.01p/th higher on average. The modest shift higher was felt across Europe with gains in the UK market mirrored in the Dutch TTF gas hub. The front month contract March ended the week at 147.89p up 3.92 pence per therm, a price range not seen since 24 January. The small bounce in curve prices will continue to attract LNG cargoes from Asian competition. NBP prompt contracts also ended the week in positive territory, amid cold weather. A Norwegian import increase of 6MCM failed to have any effect on the upward momentum as low wind generation supported demand. The Within day and Day ahead contract settled 7.00p and 11.55p higher respectively.
GB baseload contracts take direction from an uptick in gas and carbon prices
GB baseload future contracts rebounded during Friday’s session, with products across the curve gaining value. Support emerged from a bullish carbon market coupled with an uptick in UK gas prices. The front month contract March was the biggest winner, settling £9.00/MWh higher at £152.50/MWh while the bellwether contract Summer 23 closed £6.50/MWh higher at £157.50/MWh. EUA carbon spot contract closed at €90.67 a tonne, a price not seen since early May last year. The upside support has emerged from trading interest as the market has defied fundamentals, in particular supply outlook as an increase is imminent.
Crude oil markets shed significant value on Friday
Global oil markets opened strong on Friday morning, as the Brent crude front month peaked at $84.20 a barrel. However, it failed to hang onto the early gains and eventually shed significant value, closing $2.43 lower at $79.74 a barrel. The market reacted to heathy US job growth coupled with an unemployment rate of 3.4 percent, the lowest level in 53 years. The news raised concerns that the Federal Reserve may become more aggressive with interest rates. Uncertainty surrounding the imminent EU embargo on Russian refined products also left the market nervous, as EU diplomats agreed a price cap of $100 a barrel on products that trade at a premium to crude and $45 a barrel for products that trade at a discount.
UK gas markets have opened lower this Irish bank holiday Monday
UK gas prices have opened soft this Irish bank holiday Monday, with the front month contract last trading at 144.42p per therm, down 3.47p from Friday’s settlement. Liquidity is thin, with the front quarter the only other contract to have traded, nonetheless it is down 4.90p at 147.89 pence per therm. The GB gas system has opened 14MCM undersupplied, with demand forecast at 324MCM. The wider energy complex is pushing higher this morning, with the EUA Dec 23 contract last trading at €95.23 a tonne while Brent Crude front month is at $80.21 after its heavy losses last Friday.
06 February 2023
