NBP curve contracts edged up on Wednesday, gleaning support from increases across the prompt and whispers of trade talks between China and the U.S.

Gas Market

NBP curve contracts edged up marginally on Wednesday, gleaning support from increases across the prompt and whispers of trade talks between China and the United States, which could alleviate some of the recent economic fears. The front month contract posted a gain of 2.56p to close the session at 86.88p per therm. A forecasted increase in temperatures from next week was partially offset by a downward revision to wind production levels which is expected to lift gas-for-power demand over the same period. The scheduled arrival of three LNG vessels next week however should curb further upside. The Day ahead contract increased by 2.63p day-on-day to close at 85.00p per therm. Gains on the Spot market were limited by a strong presence of renewables in the power stack on the day, increasing by 1.95p to settle at 86.25p per therm.  

Power Market

Near curve GB Baseload contracts edged up on Wednesday, seeking direction from increases across the NBP market. The front month contract made the biggest day-on-day move of the curve, gaining £2.60/MWh to end the day at £74.85/MWh. A downward revision to wind output levels lifted the prompt market, with the Day ahead contract increasing by 32.7% to settle at £82.85/MWh. A new 500-megawatt electricity interconnector between Ireland and Wales was formally launched yesterday, enabling the importation of electricity into Ireland from Britain and the export of any surplus renewable electricity from Ireland. The interconnector has enough capacity to supply electricity to 380,000 homes.  

Oil Market

On Wednesday, oil prices drew strength from news that trade talks between China and the United States were imminent, while healthy economic indicators coming from China also added to the upside. Although details surrounding the trade talks were vague, there was no denying numerous economic data releases from the Chinese National Bureau of Statistics (NBS) which painted a much-improved economic picture. March retail sales increased by 5.9% year on year, while industrial production for the same month rose by 7.7% year on year, the strongest expansion in industrial output since June 2021. With these numbers pointing to potentially stronger oil demand levels, the front month Brent contract increased by $1.18 day-on-day to close at $65.85 a barrel.  

Markets this morning

NBP curve prices have this morning posted marginal day-on-day gains, with the front month contract last going through at 87.08p, up 0.52p on Wednesday’s close. Despite yesterday and this morning’s increases, the front month contract remains 15.2% lower than the start of the month. The prompt market is quiet so far this morning. Warmer temperatures and increasing wind levels from tomorrow should weigh on the Day ahead product, while the Spot could be supported by low wind generation levels forecast for today. Oil prices have this morning added to yesterday’s gains after the United States imposed new sanctions to curb Iranian oil exports. The front month Brent contract last went through at $66.24 a barrel, up 39 cents day-on-day.