New record closing price for February baseload power

Day of records on the NBP as gas prices surpassed previous highs

It was a day of records on the NBP as gas prices surpassed previous highs and contracts on the near curve and prompt settled between 71.00p and 82.00p higher.  Prices soared yesterday on the back of reports that showed Russian supplies were reversed at the German-Polish boarder which pressures already tight European reserves and pushed up prices.  Temperatures are set to fall below normal in the week after Christmas and this also added to the support on the day.  The front month peaked at 470.83p before closing at 451.72p, gaining almost 80.00p on the day.  The February contract closed at a record high for the NBP of 452.35p yesterday. Prompt prices also ploughed into new territory with the spot and day ahead products closing at 448.05p and 455.05p respectively.

Surging gas prices prompted similar gains in the GB baseload power

The surging gas prices prompted similar gains in the GB baseload power market on Tuesday as futures recorded fresh highs.  The front month closed at £570.25/MWh up £80.00/MWh on the day but the February contract claimed the new record closing price for baseload power at £599.75/MWh, gaining £124.75/MWh on the day. In a move at odds with the rest of the power market and indeed the prompt on the NBP, baseload for the day ahead eased by £35.78/MWh to £349.22/MWh on Tuesday.  Pressure from forecasts for increasing wind generation and a return of the nuclear reactor at Heysham are to help to widen supply margins.

 Brent recorded its largest one-day gain in over two weeks

Brent recorded its largest one-day gain in over two weeks on Tuesday after the Moderna declared it’s booster vaccine provides protection against the Omicron variant.  There has been a bearish sentiment of late as the latest strain of the coronavirus grabs hold and is becoming dominant and has caused nations to restrict travel.  It is likely that this will continue in the short term with more countries looking at imposing further restrictions especially as the holiday period approaches.  Brent settled $2.46 a barrel higher at $73.98 a barrel yesterday.  Carbon prices reversed some of Monday’s gains yesterday with the spot contract closing down €2.39 per tonne.

 On the crude oil markets, prices have see-sawed

UK gas demand is forecast a touch lower at 338MCM for today and supplies are showing a surplus of 18MCM.  The comfortable system should see prompt prices open softer, but no trades have been agreed thus far.  On the curve, near futures are around 30.00p down in early trading and the front month last traded at 419.00p, further out, the summer contract has shed 12.00p to last trade at 303.00p. In the crude oil markets, prices have see-sawed within a tight range and Brent is currently 37 cents higher at $74.35 a barrel.      

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