Tuesday’s session brought a stop to the recent upward

13 September 2023

Gas Market

Gas markets on Tuesday were essentially flat day on day. The front month, October, opened in positive territory before news hit the market that Chevron, the owner of the Australian LNG facilities, asked the Fair Work Commission to intervene in the negotiations with unions. In Australia the Fair Work Commission can force the two parties into an agreement, with the hearing scheduled for the September 22nd it is unclear if the proposed 24-hour work stoppages will proceed from Thursday. As a result, prices declined from their early morning highs and have traded just below Monday’s close for the majority of the day. October closed at 86.97p, 2.84p lower, while winter-23 and summer-24 closed at 121.65p and 122.78p respectively, a fall of three quarters of a penny on average. Day ahead and within day prices fell by an average of 3.00p per therm with the Troll field expected to return on Thursday.

Power Market

Weak carbon and NBP markets helped the GB Baseload power market to reverse some of the recent gains, with most contracts making losses day on day. Winter-23 contract fell by £1.75/MWh due to faltering gas markets. The day ahead contract fell by £8.00/MWh due on part to the falling gas market but also due to strong wind output on the system. EUA contracts fell to a new three-month low due to selling pressure, low demand and plunging UKA prices. Despite some strength in the morning prices tumbled in the afternoon before closing just above €81/tonne for the Dec-23 contract.

Oil Market

Global oil markets continued the recent upward trend across Tuesday’s session. Front month crude increased by 1.6% despite the expectation of further interest rate hikes by the ECB. Brent closed the session at $92.06 per barrel, with WTI assessed at $88.84 per barrel. OPEC countries remain optimistic over the resilience of global economies to grow in the face of rising interest rates, with the organisations latest forecast for 2024 oil demand showing an increase compared with 2023. Also supporting prices in the near term is the closing of four of Libya’s oil export terminals over the weekend in the wake of the deadly Storm Daniel that struck the country causing catastrophic flooding.

Markets this morning

The UK system opened slightly oversupplied this morning, but that is not enough to prevent strength returning to the gas markets. Near term contracts have all opened in positive territory, putting prices back in line with Monday’s close. Oct-23 last traded at 90.25p, an increase of 3.28p/therm, while winter is currently offered at 123.73p. Oil shows no sign of relenting as the Brent front month contract continues its recent rise, last traded at $92.77 per barrel, as tightening supply continues to influence prices.  
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