Day ahead prices declined to a seven-month low amid mild temperatures and strong wind generation helping to suppress demand.

14 February 2024

Gas Market

NBP gas prices continued their recent decline with both summer-24 and winter-24 reaching new 25-month lows. It appeared as if prices had found some support at Monday’s closing price, with contracts trading higher for the majority of the day. However, in late afternoon prices flipped into negative territory, with both seasonal contracts posting day on day losses and reaching new lows. At 63.29p/th and 77.24p/th respectively, both contracts are continuing to strive to reach pre-energy crisis levels. the annual price for 2024 now stands at 67.33p/th, below the 2013 outturn price of 67.89p/th. Although 2013 is the high watermark level for pre-2021 wholesale gas prices, it is encouraging that we are now back in that territory.

Power Market

GB baseload contracts continued their decline spurred on by the falling NBP, with losses more muted than previous sessions. The front month Mar-24 declined by 20 pence to £59.30/MWh, with summer-24 sliding to £58.88/MWh. On the far curve the summer-26 and winter-26 contracts both took direction from a strengthening UKA carbon market, and increased in price day on day. On the EUA carbon market prices continued their downward trend. Spot prices fell to €54.7/tonne, despite attempts at a price rebound that was short lived. The Dec-24 contract fell to €56.65/tonne, with €55.00 a tonne now a real possibility in the near term with the bi-weekly Polish auctions due this week adding further credits to the market.

Oil Market

The upward momentum returned to oil prices on Tuesday amid continued tensions in the Middle East. The world is waiting on to see if Israel will launch a ground offensive into the Palestinian city of Rafah, with Irish Taoiseach Varadkar claiming that Israel is “blinded by rage”. Despite the best efforts of US, Egyptian and Qatari officials to reach an agreement for a truce with their Israeli counterparties, the region remains on tenterhooks. As a result, oil prices increased by 77 cents, with the front month Brent crude contract assessed at $82.77 per barrel. Prices could have increased further if it weren’t for US consumer prices rising more than expected, leading to economists speculating that interest rate cuts could be delayed by the Federal Reserve.

Markets this morning

Gas prices have opened in negative territory again as the recent decline shows no sign of stopping this morning. Day ahead gas is trading 1.60p/th lower, while summer-24 is also testing new post energy crisis lows at 62.75p/th. Temperatures across Northwest Europe are forecast to be as much as 7 degrees above seasonal norms towards the end of the week which is suppressing gas demand and feeding into the decline of contract prices. Oil prices continue to increase with tensions in Gaza and the wider Middle East still high. Carbon prices have slid lower again this morning as the Dec-24 contract breaks the €56.00/tonne mark.