Global oil markets fell on Wednesday

03 August 2023

Gas Market

There was a mixed sentiment in the UK NBP gas market yesterday, with the near curve regaining some of the lost premium over the last week, while further out the curve was relatively flat. The front months and prompt prices were boosted by news of additional unplanned maintenance at the Norwegian Troll field, which increased offline capacity by 11.5 mcm/day more than was originally scheduled. The planned maintenance at Troll was originally scheduled for 1-13 August but the additional maintenance has an unknown end date. The front month September-23 contract settled near its high of the day at 72.16 pence per therm, up 4.26p on the day, however when you look at the five-day movement the September-23 contract has declined by 5.12p/therm. On the prompt, the Within day and Day ahead contracts settled up 3.00p and 4.00p.  

Power Market

Gb baseload contracts had limited price movement on Wednesday. The front of the curve tracked the NBP gas market although gains were capped due to the decline in EUA and UKA carbon markets. The front month September-23 contract settled at £75.00/MWh, up £1.00/MWh on the session while further out the curve fell fractionally. Baseload for the Day ahead contract closed down £8.80/MWh with strong wind output pressuring prices. Both EUA and UKA carbon markets continued their recent downward trends on Wednesday. EUA Dec-23 contract settled at €83.18 down €1.55 a tonne on the session and when you look at the five-day move for the contract, it has declined by €7.57.  

Oil Market

Global oil markets fell on Wednesday amid a decline in financial markets after the rating agency Fitch downgraded the U.S government’s top credit rating and the U.S. government pulled an offer to buy 6 million barrels of oil for the Strategic Petroleum Reserve. The losses were despite a historic drop in U.S crude stocks which fell by 17 million barrels, the largest drop in U.S crude inventories according to records dating back to 1982. The draw was driven by increased refinery runs and strong crude exports. Both WTI and Brent front month contracts rose by more than a dollar a barrel earlier in the session buoyed by falling U.S stockpiles but the front month October contract for Brent crude settled at $83.20, down $1.71 a barrel while WTI closed down $1.88 on the session at $79.49 a barrel.  

Markets this morning

NBP futures have pushed higher this morning with the front month contracts continuing were they left off from yesterdays session. The front month September is currently trading 3.84 pence per therm higher at 76.00p while further out the curve contracts haven’t taken a firm direction yet with the Winter-23 contract trading up 1.35 p/them while the Summer-24 contract is trading down 0.82 p/therm. On the prompt, both the Within day and Day ahead contracts are in positive territory, up 3.00p and 4.00 p respectively as the outage at Troll has been extended by a day reducing Norwegian flows and the UK gas system has opened slightly undersupplied this morning.  
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