Energy markets have flipped again this morning with gas, oil and carbon all moving higher

12 October 2023

Gas Market

European gas prices eased on Wednesday as the markets corrected after two days of sharp gains.  On the NBP curve, the November contract declined by 8.09p to close at 116.62p while Summer-24 settled at 125.01p, down 5.00p.  Prompt prices were mixed with the Spot and Day ahead adding 5.00p and 4.55p respectively as Norwegian outages continue, while contracts from the weekend eased marginally.  While the losses were welcome yesterday, the market remains on edge with threats to LNG supplies from potential strikes at plants in Australia and a possible escalation in volatility in the Middle East could hamper LNG supplies from Egypt. Egypt imports gas from Israel and exports LNG around the world although very low volumes have shipped to Europe recently. The damage to the offshore Balticconnector pipeline connecting Finland to Estonia is still under review and the suspicions of sabotage continue to spook the market.

Power Market

The declines witnessed on the NBP curve pressured GB baseload futures yesterday while lower carbon prices also weighed.  The front month, November settled at £108.25/MWh down almost 6.0% or £6.75/MWh. The front Summer contract eased by £2.75/MWh but remains £12.75/MWh higher over the last week. Carbon EUAs shed just over 1.0% with the Spot closing at €83.12 per tonne.Baseload for the day ahead climbed by £34.69/MWh yesterday with forecasts for wind generation to fall below 2.5GW for Thursday.  Wind generation has been in excess of 7.5GW for most of the week.

Oil Market

Crude oil prices continued to ease on Wednesday as Brent shed $1.83 to close at $85.82 a barrel as Saudi Arabia said it was working to help avoid an escalation in the conflict.  It was feared that an increase the conflict between Hamas and Israel could disrupt oil supplies in the Middle East.  If it’s proven that Iran was involved in the attacks at the weekend the U.S. may seek to reimpose sanctions on Iran’s exports.  Saudi Arabia and Russian delegates were reported to have met yesterday and Saudi Arabia pledged they would continue its current strategy of voluntary cuts to bolster the market.  The U.S. benchmark, West Texas Intermediate dell by $2.48 to $83.49 a barrel.

Markets this morning

The energy markets have flipped again this morning with gas, oil and carbon all moving higher as the markets remain on edge.  The front month of the NBP curve opened fractionally lower but has increased since with the latest trade going through at 123.27p, a gain of 6.65p on last night’s close. Further out, the Summer contract is just 3.99p up at 129.00p.  Prompt prices are marginally lower with the day ahead down a penny to 112.00p while the GB gas system is showing a minor deficit. The Dec-23 carbon EUA contract is 17 cent a tonne up while in the crude oil markets, Brent is 84 cents a barrel higher at $86.66 a barrel.
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