Yesterday saw losses on the NBP gas market after three consecutive sessions of gains

07 March 2024

Gas Market 

The UK NBP gas market was set to post gains for the fourth session in a row on Wednesday but a late sell-off saw the majority of contracts finish below their previous settlement.  Early indications were for a weaker market as the front month contract opened with a loss of half a penny. However, as trading ramped up gains were the order of the day.  The front month contract traded to a high of 71.66p /therm, up by 2.96p but then reversed track mid-afternoon to close at 66.47p per therm, down by 2.23p.  The intraday movement on this contract from high to low was 5.19p. The front season contract shed 2.00p to close at 66.88p per therm.  The downward correction in the market came despite the announcement of a planned outage at the Karstø gas field which will last from 8th through to the 10th March.  

Power Market

Baseload futures continued to track the gas and carbon markets yesterday although the overall direction on the day was for contract to move lower. Early gains were reversed in the afternoon session as power contract closely tracked the NBP gas and carbon markets.  The front month April contract shed £1.70 as this contract settled at £62.15/MWh.  Likewise, Summer 2024 moved lower by £1.80 to close at £62.35/MWh. The EUA carbon market experienced the same direction as gas with early gains wiped out and the market settling lower.  The spot market price settled at €57.29/tonne, having traded up to a high of €60.83 earlier today.

Oil Market

The crude oil market broke a two-session losing streak on Wednesday as some new economic data out of the US gave a lift to the market. This allied with the latest weekly oil inventory data provided a boost for both the front month Brent and Nymex contracts.  Better than expected US jobs data was the first positive signal for crude, and this was closely followed by inventory information from the Energy Administration, both of these factors outweighed the ongoing weakness in the dollar against a basket of international currencies.  Both the Fed and ECB will meet today to discuss interest rates, and this will have a key impact on the crude oil market.  At market close on Wednesday the Brent crude contract was marked up by $1.06 at $83.10 while WTI closed at $82.96 a barrel.  

Markets this morning

The gas market has opened weaker this morning building on the losses from yesterday. The loss of premium is minor at this early stage and true direction will only be known when more trades go through. The front month contract is priced at 66.32p, down by 0.15p from last night’s close. Most other contracts have yet to trade and bid offer spreads are wide at this stage. Forecasts for wind generation today are coming in lower than the seasonal norm which will lead to higher demand from this sector. This is being countered by a ramp up in supplies via the Langeled pipeline which are topping 73MCM. Brent crude has extended overnight losses with 61 cents coming out of the front month.