At the front of the curve, NBP futures settled an average of 5.15p lower yesterday

Gas Market

Gas prices across Europe began the week by shrugging off all the bullish factors of the day and ended lower.  The markets ignored reports of LNG tankers from Qatar being diverted around the Cape of Good Hope away from the Suez Canal. The longer trip adds around nine days to LNG deliveries to the UK and there are ample supplies to cope with that delay at present. An unplanned outage at the Aasta Hansteen field curbed Norwegian gas imports by up to 20mcm yesterday but increased wind generation dented gas demand on the day and limited the impact of the outage. At the close, the front month shed 5.80p to settle at 74.12p, a new 16-month low.  On the prompt, the Spot and Day ahead products closed 6.15p and 4.75p down respectively.  

Power Market

The significant declines on the NBP curve pressured GB baseload futures yesterday.  The February contract lost £5.00/MWh on the day while the Summer-2024 contract settled £4.50/MWh down.  Losses to the longer curve were limited by gains to carbon on the day.  Carbon UKAs gained around 1.3% while EUA contracts out to 2026 added 2.1% with the Dec-2024 product closing at €66.90 per tonne. While wind generation rose above 12.0GW on Monday, forecasts for Tuesday showed a drop to below 10.0GW. The lower projection provided some support to the Day ahead contract which added £4.69/MWh yesterday.  

 Oil Market

The escalation of the conflict in the Middle East limited losses to crude oil prices on Monday and despite reports that oil tankers are being re-routed around South Africa, crude oil prices eased slightly.  The Israel Hamas war has not impacted crude oil prices, in fact prices have fallen since the war started.  Brent was $84.58 a barrel on the 06-October, the day before the Hamas invasion, and settled at $78.15 a barrel on Monday.  The U.S. dollar strengthened on the day which weigh on crude oil prices while China’s central bank left interest rates unchanged when a cut was expected.  China is to release more economic data during the week, and this should give a better view of where their economy is and if interest rates will be lowered any time soon. Meanwhile political protests in Libya continue shut in the Sharara oil field but could threaten to hamper production at two other plants.  

Markets this morning

The current cold snap hitting the UK is expected to last until the end of the week and gas supplies have been tested this morning with demand pitched at 372mcm.  Supplies are just 2mcm shy and prompt prices have opened fairly flat with the Spot 0.10p down while the Day ahead is 0.25p up. On the curve, near futures are showing marginal declines with most contracts within a penny of last nights close.  Crude oil prices were also trading sideways earlier but have ticked up in the last hour with Brent last trading at $78.65 a barrel. Carbon EUAs have reversed yesterday’s gains with the Dec-24 contract at €65.58 per tonne.