On Monday, the initial trajectory of UK gas market appeared to be a continuation of the downward trend in the previous session, but a late surge in buying activity reversed the losses, and gas contracts closed higher. The NBP front month December-23 dipped to a low of 112.27p before closing 1.89p higher at 119.66p while Q1-24 hit a low of 121.60p before end the day at 128.75 pence per therm. Despite strong LNG volumes arriving into the UK, import volumes are below last year’s. With 15 cargoes expected to arrive this month into the UK compared to 26 last November. Nonetheless, Europe has increased the number of cargoes arriving from the US, as it is currently cheaper than major exporters such as Qatar due to a surplus of domestic gas output. Strong wind generation supported losses in the prompt market yesterday, with the Day ahead contract falling into double figures for the first time in nine sessions, closing at 93.50p.
Mixed movement was recorded in the GB baseload power market yesterday, however prices did not stray far from the previous sessions close. The front month contract December lost £1.13/MWh to close at £97.25/MWh while Summer 24 was unchanged at £100.50/MWh. Despite yesterday’s limited movement contracts across the baseload power curve are in positive territory when viewing the five day moving average. European carbon prices lost value on Monday, giving up the majority of the gains made in Friday’s session, as subdued demand persists ahead of the end of the 2023 auction. The EUA Dec-23 contract shed €1.53 to close at €76.96 a tonne while the UK equivalent lost £3.70 to close at £41.05 a tonne.
Global oil markets ended Monday’s session in positive territory, taking direction from OPEC’s monthly oil market report which attempted to reassure the market regarding demand concerns. The oil cartel stated that “recent data confirms robust major global growth trends and healthy oil market fundamentals”. The market took this announcement in its stride and the Brent crude front month flipped from a low of $80.41 a barrel to closing at $1.09 higher at $82.52 a barrel. Despite yesterday uptick, the commodity is still weak in comparison to its recent 10-day high of $90.48 per barrel, a $7.96 premium to yesterday’s settlement. Additional support was provided by a weaker US dollar, contributing to yesterday’s gains.
Markets this morning
UK gas contracts have opened lower this morning, with the front month contract December last trading at 116.04p while Summer 24 last traded at 116.54p, approximately 1.00p below last weeks averaged settlement price. European markets have opened to the news of an outage at Freeport where flows dropped to zero yesterday, due to an expected power outage. However, the latest data indicates a recovery today. Freeport is the second largest US LNG exporter. In the prompt market, the NBP Day ahead contract has last traded at 95.00p while Within Day is yet to trade. Global oil prices are flat this morning, with the market expected to pay close attention to US inflation data which is expected to be released today.