NBP: Far curve weighs on prompt after early rally ends
NBP contracts retreated on Thursday as a weak far curve exerted downward pressure on the prompt before a late wave of buying pared some of the losses.
Despite opening strongly, sentiment shifted over the course of the session, with weak economic data and a decline in crude oil price leaving traders bearish about the outlook for longer-dated contracts.
The initial rally was fuelled by concerns about dwindling LNG storage levels at the Isle of Grain terminal, according to sources, as well as a spate of technical buying, given the falls over the previous session.
However, the prompt soon turned negative in tandem with the sinking far curve, with the Day-ahead contract trading as low as 61.25p/th, before climbing to close at 61.70p/th, up by 0.35p/th on the session.
Colder forecasts lent some support to short-dated products, but failed to ignite sustained buying.
Supply concerns were eased by the return to production at Centrica's South Morecambe field, which was taken off line on Wednesday evening because of technical process issues.
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