Monday saw gas prices recoup Friday’s losses

Gas Market

The Norwegian Troll field returned to production following unplanned outage last week, however prices reversed Friday’s losses as contracts out to Summer-24 all gained in value. Traders were eyeing further upcoming scheduled maintenance at the end of August that will extend into September which helped support the prices. The September contract gained 3.56p to close at 76.49p per therm, reversing all of Friday’s losses. Further along the curve prices were essentially flat with the slight fall off in oil seeing prices dip slightly session on session. On the prompt prices increased by less than 1.00p as planned maintenance at a UK gas field was extended until the 8th of August.

Power Market

Prices along the GB baseload curve tracked gas prices higher with the near-term months bearing the brunt of the increase. November gained almost £4.00 per MWh, while the entire winter-23 contract only gained £1.25 to close at £115.25/MWh. On the prompt prices fell by £1.75 day on day as wind generation is expected to increase across the next week, offsetting an expected fall off in solar generation. EUA Carbon continued its recent decline despite a cut in auctioned volumes. The Dec-23 contract tested the market with an intraday high of €84.60 per tonne before falling to close at €82.68.

Oil Market

Brent crude oil fell by 90 cents on Monday following six straight weekly gains, as the front month contract settled at $85.34 per barrel. Traders are anticipating a drop in demand in the US due to the end of the driving season resulting in less demand for gasoline and hence oil. The dollar also gained in value against other countries with the likelihood of further interest rate increases in order for the Fed’s 2% inflation target. Expectations continue for demand to be lower in China as the country struggles to recover post covid, with the latest tourism figures down in the country.

Markets this morning

The UK gas system is 20mcm long this morning, indicating an oversupplied system. As a result the within day market is down approximately 3p from yesterday’s close. On the curve all contracts are down following yesterday’s sharp increase. The front month last traded at 75.84p having been as low as 74.52p per therm, while the front season is flat to yesterday’s close at 118.29p. Oil is continuing its decline at $84.40, a fall of 94 cents from last nights close, while carbon has recovered slightly with Dec-23 last trading hands at €83.04 per tonne.  

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