NBP forward contracts continued to edge up for a second day in a row on Wednesday following the recent downturn.

Gas Market

NBP forward contracts continued to edge up for a second day in a row on Wednesday following the recent downturn. Elevated demand levels forecast for much of July, driven by hot-weather related cooling demand, created expectations that storage withdrawals could be needed over the period, which could in turn could drive up the need for further injections later in the summer. LNG arrivals over the period could mitigate this support, although just one cargo is currently scheduled to arrive into the U.K. next month. The August-25 contract gained 0.68p day-on-day to settle at 80.11p per therm. The prompt market saw modest losses on more normal temperatures, a drop in domestic demand and strong wind levels with the Day ahead contract shedding 0.50p to settle at 79.00p per therm. A slightly undersupplied system fed upside into the Spot, with the Within day contract gaining 0.50p to close at 81.10p per therm.

Power Market

The GB Baseload Day ahead contract was pressured down on Wednesday by a combination of high wind and solar forecasts, falling by £11.03/MWh day-on-day. Further along the prompt, contracts were supported by well-above-average temperatures forecast for the UK and northwest Europe in the coming weeks which is expected to drive up cooling demand levels while also posing a risk to French nuclear availability. Curve contracts were supported by upside on the NBP gas market. The upside across the NBP as well as increased buying activity fed into increases across European carbon markets, with the December 25 EUA contract gaining €0.82 day-on-day to settle at €71.59 a tonne.

Oil Market

After a few days of modest price movements, crude oil markets rose by 2.9% on Wednesday. Geopolitical risk continues to be a key driver as Iran suspended cooperation with the U.N. nuclear watchdog. Prices gained further support after President Donald Trump and Vietnamese state media said the U.S. and Vietnam had struck a trade agreement that sets 20% tariffs on many of the Southeast Asian country’s exports following last-minute negotiations. Gains were mitigated however after the U.S. Energy Information Administration said domestic crude inventories had risen by 3.8 million barrels last week. The front month Brent contract posted a $2.00 day-on-day gain to close at $69.11 a barrel, while its WTI counterpart also increased by $2.00 to settle at $67.45 a barrel.

Markets this morning

After opening below Wednesday’s close, NBP near months have moved back into positive territory, with the front month contract having last transacted at 81.50p per therm, a gain of 1.39p day-on-day. Wind power generation is forecast slightly below average today, but is expected to increase to very strong levels from tomorrow and into the weekend, which should hamper Day ahead gains. Crude oil prices have retreated this morning on concerns over higher U.S. tariffs and an expectation that major producers could be about to announce an output hike. The front month Brent contract last went through at $68.63 a barrel, down 48 cents day-on-day so far.