NBP futures have opened stronger after the Christmas break

Gas Market

On the Friday before Christmas, the UK gas markets closed early for the holidays and trading activity during the session was subdued. By the close of play most near contracts settled lower but movement on the day was minimal with the January contract just 0.32p lower at 85.32p.  While the front month has gained 6.00p over the previous two sessions, market weakness has seen the contract fall 66.75p since the 23-October.  Prompt prices ended the day higher with forecasts for cooler temperatures for the final days of 2023 countering the ample gas available.

Power Market

GB baseload power futures eased for the most part on Friday with near months easing by up to £0.65/MWh.  The January contract settled £0.25/MWh down at £85.25/MWh while March, the outlier for the day was assessed £1.50/MWh higher at £84.50/MWh.  Carbon EUAs for 2024 & 2025 reversed some of the gains from the previous sessions and settled around 2.0% lower. Wind generation is expected to remain at high levels over the holidays with forecasts for Wednesday around 20.0GW or almost two thirds of GB supplies. Despite this, baseload for Wednesday was assessed higher at £71.60/MWh.

Oil Market

Crude oil prices continued to ease on Friday before the markets took a break for the Christmas Holiday.  It was the second day of losses, although minor, following gains that were due to concerns of escalation of the attacks on shipping vessels in the Red Sea by the Houthi Militant group. Friday’s loss leaves the global benchmark $6.05 a barrel above December’s low point of $73.25 a barrel which was recorded on the 12th of the month.  Inflation in the U.S. has continued to ease boosting hopes that the U.S. Fed will reduce interest rates in the new year and this could provide a lift for oil consumption. The February contract for Brent settled at $79.29 a barrel on Friday, down 10 cents.

 

Markets this morning

NBP futures have opened stronger after the Christmas break with near months around 7.00p above the previous settlement. The escalation of attacks on vessels in the Red Sea has raised concerns that LNG and oil tankers could be diverted away from the Suez Canal, the quickest route to Europe from Asia.  The front month last traded at 92.81p, which is up 7.49p on Friday’s close.  Prompt prices are also rising despite a comfortable gas system with demand for today down at just 229mcm.  In the crude oil markets, Brent settled at $81.07 a barrel yesterday and is down 32 cents to $80.75 a barrel this morning.