Natural gas futures across Europe rose sharply on Monday

Gas Market

Natural gas futures across Europe rose sharply on Monday on the back of news that workers at key Australian LNG facilities could commence strike action by the end of next week.  Fears that a prolonged dispute could lead to LNG cargoes being diverted to Asia to compensate for the loss of Australian supplies.  Prices also edged higher yesterday due to curtailed gas supplies from Norway as a further round of scheduled maintenance began yesterday at key plants.  On the ICE platform, the September contract for the NBP added 11.16p, settling at 102.05p having traded between 95.30p and 102.77p over the session.  The Winter-23 contract closed at 143.00p, recording a gain of 6.92p and the increases diminished further out the curve.  Prompt prices posted sharp gains too despite the GB gas system operating in balance, and the Spot added 9.00p while the Day ahead product settled 9.45p higher.  

Power Market

The rally in NBP natural gas futures provided supported to GB baseload futures yesterday as the near curve averaged gains of £5.00/MWh.  The September contract settled with a gain of £6.20/MWh, closing at £94.20/MWh.  The Winter-23 product was £5.05/MWh higher at the end of the session and gains were more modest further along the curve.  Carbon EUAs eased marginally yesterday with the Spot closing at €86.65 per tonne. Gains to the NBP prompt coupled with forecasts for lower wind generation boosted the GB power prompt market yesterday. Baseload for the day ahead settled at £96.75/MWh, its highest close since 22-June.  

Oil Market

The firmer opening for crude oil prices was not sustained through the session on Monday and prices fell with sentiment reverting to focus on China’s poor recovery.  Earlier in the day the markets were supported by news that China’s central bank had cut its one-year loan rate in an effort to boost the economy, however, the five-year prime loan rate remained intact.  China’s economic and manufacturing data will remain a key focus for the crude oil markets as any indication of a recovery in the world’s largest crude oil importer will likely boost crude oil prices. A recovery in the dollar on Monday also added to the downside in crude oil prices as oil becomes less expensive to holders of foreign currencies.  At the end of the session Brent for October delivery was down 34 cents to $84.46 a barrel.  

Markets this morning

The September contract for the NBP opened 4.00p lower this morning but the volatility has returned, and the front month is now almost a penny up on yesterdays close on the last trade. The Winter-23 contract is flat, having traded down to 139.40p earlier.  Prompt prices have opened with sharp gains as the GB gas system is forecast 7mcm shy against today’s demand of 141mcm.  The Spot last traded at 98.50p, up 3.45p while the Day ahead product is 8.00p higher at 102.50p.  The October contract for Brent is down 20 cents to $84.26 a barrel this morning.  

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