Front months for the NBP crashed through the 70.00p marker with February closing at 68.36p, down 5.16p on Wednesday

18 January 2024

Gas Market

  The gas markets discarded the current cold snap as prompt prices for the NBP fell by between 3.75p and 6.25p per therm on Wednesday while near futures declined by around 5.00p amid ample gas supplies. GB gas demand was one of the highest for the winter so far, but supplies were comfortable, showing a 10mcm surplus an hour before the market was due to close. European storage reserves remain robust with forecasts predicting levels around 50% full at the end of the current winter.  That prospect may have led to the Summer-2024 contract falling by close to 5.00p per therm on the day, meeting no resistance as it broke through the 70.00p mark to settle at 68.10p. The front months also crashed through the 70.00p marker with February closing at 68.36p, down 5.16p.

Power Market

  The weakness in the NBP curve along with significant falls in carbon prices left the GB baseload curve marked lower on Wednesday.  The front month, February, declined by £3.90/MWh to settled at £67.75/MWh while the summer-2024 contract closed at £61.75/MWh, down £3.83/MWh. Baseload for the day ahead also declined on the day and settled at £76.91/MWh. Carbon EUAs fell by an average of 3.8% on Wednesday as the sell-off continued. EUA contracts reached a two-year low with the Dec-24 product shedding over €2.00 to close €63.31 per tonne. UKAs yielded around 2.3% yesterday with the Dec-24 contract closing at £33.99 per tonne.

Oil Market

  Crude oil futures softened on Wednesday with disappointing data from China but losses were pared back later in the session as news of refineries in North Dakota halting production due to freezing temperatures. China’s growth for the final quarter of 2023 was 5.2% but this was below anticipated levels for the world’s second largest oil consumer.  It raised concerns that China’s economy may recover at a slower pace than expected in 2024 and crude oil prices fell by close to $2.00 a barrel early on.  Losses on the day were partially reversed as reports emerged of crude oil output in North Dakota falling by up to 700,000 barrels per day or just over half it’s normal daily output as temperatures plunged below zero. At the close, Brent for March delivery was 41 cents down at $77.88 a barrel.

 Markets this morning

  With near futures on the NBP dipping below the 70.00p per therm marker yesterday prices have ticked up this morning having triggered stop/loss levels. The front month is 1.75p up having last traded at 70.11p while the Summer-2024 contract at 69.50p is up 1.40p.  Prompt prices are flat so far, while the GB gas system is forecasting a minor deficit against today’s demand of 377mcm. Carbon EUAs are up by around 30 cent per tonne while in the crude oil markets, Brent has reversed yesterday’s loss and is exchanging at $78.35 a barrel after OPEC forecasts 2025 global oil demand to rise by 1.85m barrels per day.