Near NBP futures settled higher after volatile session

Gas Market

Gas prices continued to rise yesterday despite consistent gas nominations transiting the Russian Ukraine boarder near Sudzha.  The market had reversed early morning gains with near months briefly trading below Wednesday’s close, however with more Russian troops being deployed to defend the border town, concerns of disruption to the gas infrastructure were heightened again.  The front month peaked at 99.28p per therm before settling at 98.11p which is a gain of 3.65p day-on-day. It’s the highest settlement for the September contract since the first week in December.  Further along the NBP curve, Winter-2024 added 3.25p to close at 110.47p.  On the prompt a comfortable gas system along with forecasts for increased wind speeds pressured the prompt as the Spot and Day ahead yielded 2.40p and 4.65p respectively.  

Power Market

Baseload for the Day ahead fell to £18.00/MWh yesterday as wind generation is forecast to rise above 17.0GW while demand is expected to remain around 30.0GW.  Supplies from solar are forecast to increase on Friday which will also reduce the demand on gas fired generators.  Baseload futures tracked the NBP curve yesterday and the front month, September, settled £2.00/MWh higher at £81.75/MWh, the Winter contract closed at £93.75/MWh. Carbon EUAs settled flat for the most part after a muted session yesterday. The Spot price for EUAs was 9 cent up at €69.81 per tonne while the Dec-24 contract settled a cent lower at €70.85 per tonne.  UKAs eased slightly with contracts for 2024 and 2025 down by 22p per tonne.  

Oil Market

Crude oil prices racked up a third day of gains on Thursday as rising tensions in the Middle East and Russia provided support.  Concerns that the war between Israel and Hamas could spread and disrupt oil supplies in the region continued to underpin crude oil prices as Israel increased airstrikes on Gaza. Further support arrived from reports that Libya has reduced output at its Sharara field due to protests. The latest U.S. unemployment benefits data showed claims were down last week and eased fears of a slowdown in the labour market. At the close, Brent for October delivery added 83 cents to settle at $79.16 a barrel. The September contract for the U.S. benchmark, West Texas Intermediate, settled at $76.19, up 96 cents a barrel.  

Markets this morning

NBP futures have opened softer this morning with the front month trading down to 96.40p however, latest trades have seen the September contract pick up to 97.10p which is a penny down on last night’s close.  The Winter-2024 contract has yet to trade but likely to open around a half a penny down.  Prompt prices are a little sluggish off the mark, but the gas system is around 9mcm long against the forecast demand of 152mcm for today.  GB gas demand is down around 10mcm from yesterday due to increased wind generation which has displaced several gas fired generators from the power stack.  Brent is rangebound this morning with the latest exchange going though at $79.13 a barrel.