Limited price movement was witnessed in the UK gas market on Friday, however, the front of the curve ended the week in negative territory for the fourth consecutive session. The front month contract December 23 decreased by 1.73p, closing at 113.74p, while Summer 24 saw a loss of 1.66p, ending the session at 115.61 pence per therm, marking a 9-session low. In the prompt market losses were more pronounced, as the Day ahead contract lost 6.00p to close at 100.05p. These losses were underpinned by robust market fundamentals, including wind generation aligning with seasonal norms and temperatures fluctuating above the seasonal average.
For the second consecutive session GB baseload power future contracts moved lower on Friday. Once again the losses were limited, with the front month contract December 23 shedding £0.75/MWh to close at £96.50/MWh while the Q1-24 lost £1.00/MWh to end the session at £110.25/MWh. Friday’s losses in the power market were aligned with the downward sentiment in the UK gas market. EUA carbon prices reversed early gains to end Friday’s session lower, as selling pressure continued. The EUA Dec-24 contract broke the €80 a tonne price mark to close at €79.87 while the spot product closed €0.83 lower at €75.99 a tonne.
Global oil market’s rallied on Friday, closing $3.19 higher at $80.61. However the commodity has fallen short for the fourth week. Friday’s 4% increase was a result off an oversell throughout the week, particularly when the geopolitical tension in the Middle East is still at play. Additional support arose from more G7 sanctions on entities facilitating the shipment of Russian oil above the $60 price cap. The G7 imposed the price cap on seaborne Russian crude oil last December in an effort to restrict Russia without disrupting the global flow of energy. However, the sanctions have not been as effective as the group hoped, as Russia has built up alternative networks to sell their oil, outside of G7.
Markets this morning
This morning’s UK gas market has opened higher, with the front month contract gaining 4.83p to last trade at 118.57p while Q1-24 last traded at 127.00p up 5.25p from Friday’s settlement. While the risk premium linked to the Middle East conflict has shown a consistent decline, the focal point has shifted towards weather fundamentals this morning. The latest forecast signals a shift towards cooler weather in northwest Europe, contributing to this morning’s upward movement in prices for the near curve. European gas storage inventories have started to decrease; however, the market is in a comfortable position with gas storage levels at 98% fullness.
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