UK gas prices lost value for the fourth consecutive session
UK gas prices lost value for the fourth consecutive session on Thursday, however the sentiment was rather muted when compared with the volatility experiences in recent times. The front month contract March settled at 131.53p down 3.08 pence per therm on the day while the bellwether contract Summer 23 lost 3.10p to closed at 136.80p, a price not seen since last March when Russian gas flows were still flowing into Europe. Losses were also evident across European gas hubs yesterday, with the Dutch TTF front month hitting a 17-month low. Ample LNG supplies and robust Norwegian flows into the UK pressured the prompt market yesterday, as the Within day and Day ahead contract settled at 134.05p and 132.05p respectively.
GB Baseload future contract continued to tick downwards
GB Baseload future contract continued to tick downwards during yesterday’s session, taking direction from soft UK gas prices. The collapse of spark spread premiums has extended and provided additional pressure to the market. Summer 23 settled at £143.25/MWh down a modest £0.75 on the day, however the contract has shed £40.50/MWh month on month. Baseload for the day ahead weakened as a healthy system margin weighed on the market, with the Day ahead contract settling at £140.12/MWh. However, losses were capped as carbon prices gained momentum.
Brent crude market settled lower
Global crude oil markets failed to hang onto their recent upward trend on Thursday, as the Brent crude market settled lower to end three consecutive days of gains. Nonetheless, losses were marginal with the front month contract shedding $0.59 to end the session at $84.50 a barrel. News emerged that no serious damage to oil infrastructure was caused from the recent earthquake which effected Syria and Turkey, removing supply concerns and in turn pushing prices lower. Additional pressure was found in an anticipated US Federal Reserve rate hikes in order to help control inflation. However, gains were curtailed by a weaker US dollar since crude transactions are most frequently conducted in dollars.
Sentiment in the UK gas futures market is relatively flat this morning
Sentiment in the UK gas futures market is relatively flat this morning, with the front month contract up a modest 3.35p at 134.88 pence per therm while seasonal contracts are yet to trade. NBP prompt prices have pushed higher, taking direction from a revised decrease in wind generation output over the weekend. The Day ahead and Within day contracts last traded at 137.00p and 140.00p respectively. In the wider energy complex, Brent crude has opened with a bullish tone this morning, gaining $2.11 from yesterday’s settlement while EUA carbon market has also opened firm, as the Dec 23 contract last traded at €92.72 a tonne.
10 February 2023
