On Thursday, UK gas prices displayed a marginal uptick, extending the gains from the previous session, but remained in negative territory over a five-session average. Yesterday’s gains came despite healthy near-term fundamentals, including aggregate European storage levels at over 90% and LNG imports at a six month high. The front quarter Q1-24 opened at the daily low of 97.70p before pushing higher to gain 1.53p on the day and closed at 101.06p. NBP Summer-24 contract closed at 98.08p yesterday, a significant discount to 239.06p its closing price this time last year. Gas demand in the UK pushed above seasonal average yesterday, as a result gains were recorded in the prompt market, as the Day ahead contract gained 1.75p to close at 96.00 pence per therm.
Limited price movement was recorded in the GB baseload power market yesterday, following a similar trajectory to the UK gas market. The front quarter Q1-24 edged £0.75/MWh higher to close at £92.75 and maintain a £7.50/MWh premium over Q2-24. In the prompt market baseload for day ahead deliver gained £3.80/MWh. The contract is presently trading at an average of £106.42 in December, holding an £11.04 premium over November. European carbon markets made a recovery attempt as strong buying activity bolstered the EUA Dec-23 contact ahead of its expiry. The contract almost broke the €70 price mark, closing at €69.97 a tonne. The Dec-24 contract also displayed strength, closing at €72.97 a tonne.
After hitting a five-month low in the previous session, Brent crude oil prices pushed higher in the early hours of trading on Thursday. The market’s trajectory was influenced by a 5.4 million barrels per day decline in U.S. crude stocks compared to the previous week, a figure approximately 1% below the five-year average of 445 million barrels per day for this season. Despite the promising start, the market lost its upward momentum as the day progressed, with contracts eventually closing in negative territory. Uncertainties surrounding the global oil demand outlook for 2024, coupled with weakness in the Chinese economy, fed into the bearish sentiment. The Brent crude front month closed at $74.05, its lowest level since 22 June and down $7.97 over a five session average.
Markets this morning
This morning UK gas market is relatively flat with limited trading activity. The contracts that have traded are fractionally higher than the previous session, with Summer 24 last traded 0.51p higher at 98.59p while gas for delivery in January last traded at 100.32p, an increase of 0.38p from yesterday close. In the prompt market, contracts are yet to trade, however with the UK gas system opening balanced strong price movements are not expected. Two LNG cargoes from the U.S. are forecast to arrive at UK ports over the weekend. In the wider energy landscape, Brent crude has opened with a clear upward trajectory, as the front month last traded $1.31 higher at $75.36 a barrel.