The absence of any significant price drivers was reflected in the near curve of the NBP on Friday

Gas Market

The gas system recovered from an early deficit on Friday and with forecasts for wind expected to pick up, prompt prices for the NBP edged lower.  A subdued opening to the futures market saw NBP futures remain within a half a penny of the previous close until midway through the session.  The front month declined through the afternoon with weakness on the prompt, eventually settling over a penny per therm down for the day and almost flat for the week which reflected the directionless market. The Winter contract also ventured into negative territory on Friday and settled at 85.05p, having shed a penny day-on-day. Maintenance continues at many Norwegian plants with works at Troll, Kollsnes and Nyhamna scheduled to continue until the end of next week. The prompt market was undeterred, and contracts settled an average of 1.70p lower on Friday.

Power Market

GB baseload futures eased on Friday tracking NBP futures lower.  October fell by £1.27/MWh which left the contract £0.40/MWh higher for the week.  Contracts past the winter posted more modest losses for the day as the declines were limited by higher carbon prices. European Allowances continued to surge with contracts settling at fresh 12-week highs. Dec-25 and Dec-26 contracts added an average of 41 cent per tonne on Friday. Forecasts for wind generation are strong for the weekend and week ahead and put the prompt under pressure on Friday. Baseload for Monday eased by £6.25/MWh or 7.4% to £78.00/MWh. A temporary dip is expected for Monday, but wind is expected to average 12.1GW for the week ahead.

Oil Market

Crude oil prices settled above the 50-day average for the first time in over a month last Tuesday, but prices have tumbled since then. Brent eased by $1.49 a barrel on Friday taking the decline for the last three days of the week to $3.64 while over the week the global benchmark was down just under two dollars a barrel. Weak U.S. jobs data combined with expectations of further production increases from OPEC+ to weigh on prices on Friday. New jobs increased by just 22,000 in August compared to earlier in the year when around 100,000 jobs were being added each month. The decline for August will put pressure on the Federal Reserve to lower interest rates. OPEC+ are to meet on Sunday and are expected to announce a further increase in output for October as market share appears more important to the group than flooding the market and weakening prices.

Markets this morning

Russia’s weekend barrage of drone attacks on Ukraine was one of the worst since the conflict began and has prompted calls for further sanctions on Russia. The markets have opened firmer this morning with fears that further sanctions will disrupt crude oil supplies. Brent has continued to rise, recovering most of Friday’s losses with the latest trade for November going through at $66.81 a barrel.  OPEC+ has confirmed they will increase production by 137,000 barrels per day in October to maintain market share, but this was priced into the market last week. NBP futures have firmed this morning with October around 2.00p per therm up on the last trade while the Winter contract is 1.60p higher at 66.81p.