NBP futures ended just over two pence per therm lower on Monday

06 February 2024

Gas Market

 After a sluggish opening to the week, NBP futures ended the first daily session just over two pence per therm lower.  Prompt prices settled mixed with movement either way limited to a penny after unplanned outages at the Troll Field and Nyhamna plant provided a boost but was later revealed that both issues would last around 24 hours.  Gas flows through the Langeled feed were down by almost 30mcm as a result of the outages yesterday but should recover on Tuesday according to Gassco, the Norwegian gas operator. Despite this minor hiccup, gas supplies remain robust with UK LNG reserves expecting six cargoes to arrive over the next week or so while the mild temperatures and above average wind generation continue to curb gas demand.

Power Market

GB baseload futures tracked movement in the NBP futures market on Monday while lower carbon prices also weighed on longer curve contracts.  The front month, March, settled £2.03/MWh lower at £65.88/MWh while the Summer-2024 contract closed at £65.48/MWh, down £1.78/MWh.  Baseload for the day ahead ticked up to settle at £56.76/MWh after unplanned outages supported the NBP prompt earlier in the session. Carbon prices softened on Monday ahead of the EU policy meeting on Tuesday to discuss 2040 emissions reduction target for the bloc.  The Spot price for EUAs settled 93 cent per tonne down at €60.32 per tonne.

 Oil Market

Crude oil prices settled higher on Monday snapping a four-day losing streak as geopolitical concerns mount.  There were further drone strikes on the Russian Volgograd oil refinery at the weekend and while fires were reported at the facility the owners, Lukoil, have confirmed normal operations are continuing at the plant.  After the weekend strikes by the U.S. and UK on Iranian backed Houthis, its believed the U.S. are planning further attacks in retaliation for the deaths of U.S. troops killed in Jordan at the end of January.  Last week Brent lost $6.22 a barrel mostly down to disappointing economic data out of China and demand concerns remain.

Markets this morning

The energy markets have been slow to awaken this morning with only near futures for the NBP curve active.  March traded down to 68.25p earlier but the latest exchange has the front month at 70.40p which is 1.07p above Mondays settlement. Trading for prompt products is thin with no deals agreed for the Spot and Day ahead so far. Langeled nominations for today have picked up to 62mcm but the GB gas system is forecast short by 8mcm.  In the crude oil markets, Brent is 6 cents down at $77.93 but the April contract is trading in a tight range and could go either way today.