Outages at Norwegian facilities appears to have ended this morning

Gas Market

For the second consecutive session, UK gas prices experienced another dip yesterday, albeit with limited movement. Gas for delivery in 2024 lost 1.02p on average, while the front seasonal contract Summer-24 closed at 69.14p. The market appears to be maintaining a sense of stability, with most price movements over the five-day average remaining below 4.00 pence per therm. This tight price range reflects the current market fundamentals, which include European storage levels at 68% capacity and abundant LNG supply. Despite Norwegian outages this week, the UK market seems unfazed, which is a reassuring contrast compared to last year’s volatility. In the prompt market the Day ahead and Within day contract closed at 68.75p and 69.25p respectively. The Day ahead contract has averaged at 70.77p so far this month.  

Power Market

Tracking losses in the wider fuel mix, GB baseload power contracts shed risk premium for the third consecutive session yesterday. The Summer 24 contract closed at £62.50/MWh, down £0.60/MWh on the day and down £4.00/MWh over a five-day average. The front month contract March also lost £0.58/MWh to settle at £63.75/MWh. Baseload for day ahead delivery followed a similar trend, closing at £68.89/MWh on the day, down £8.39/MWh. European carbon prices dipped to an 18-month low on Thursday morning, contracts eventually edged marginally higher but posted heavy losses session on session. Strong selling activity coupled with bearish energy markets fed into the €1.64 loss on the EUA Dec-24 contract which closed at €60.68 a tonne.  

Oil Market

The Brent crude front month contract opened at $79.30 yesterday and steadily climbed throughout the day, ultimately closing at $81.63 a barrel, up $2.42. Yesterday’s strong gains were driven by Israel’s rejection of Hamas’s counteroffer to the original peace plan, heightening geopolitical tensions. Despite this, diplomatic negotiations continue, with representatives meeting in Cairo. Additionally, a stronger than anticipated drawdown in US gasoline and distillate inventories added further support to yesterday’s upward momentum, due to ongoing refinery maintenance. Prices received an extra boost earlier in the week following the U.S. Energy Department’s projection of slower growth in domestic crude production this year, improving concerns of oversupply in the global market.  

This morning

This morning’s UK gas market has continued to trend lower, with Summer-24 last trading at 67.75p, a 1.39p discount to yesterday’s settlement. Despite no significant change in market fundamentals the market appears to be correcting itself with the ongoing erosion of risk premium.  Outages at Norwegian facilities appears to have ended this morning, with the North Continental Shelf ramped up export nominations to 341MCM. The return of flows is likely to dominate the sentiment along the near curve today. Yesterday’s downward sentiment in the EUA market is clearly on display again this morning, with the EUA Dec-24 contract last trading at €59.49 a tonne.