The NBP market posted significant losses in the final hour of trading on Thursday

08 March 2024

Gas Market

Gas contracts on the UK NBP extended Wednesday’s losses as late trading brought some life to a lacklustre market on Thursday. For much of the day prices oscillated near the precious close, with prices trading in a tight range. The front month spent the majority of the session flip flopping between 66.20 pence and 66.90 pence before a flutter of activity in the final hour of trading saw prices decline, with the April contract posting a loss of 1.17p, closing at 65.30p/th. Following a similar path the Summer-24 contract also declined in the final hour of trading posting a significant decline of 1.53p, following a 2.00p loss on Wednesday, closing at 65.35p/th, while Winter-24 declined by 1.63p/th. Prompt markets followed a similar trajectory with strong market fundamentals winning out as storage remains healthy and gas demand for both heating and power generation declining.  

Power Market

GB Baseload Day ahead contracts stepped lower on Thursday, declining by almost 8% day on day. Prices were pressured by an increase in the forecasted wind generation to 20% above seasonal norms. On the curve prices tracked lower for the second successive session following movements on the NBP gas market as the summer contract closed at £61.75/MWh, a day-on-day loss of 60 pence. The EUA carbon market tracked gas prices witnessing wild swings across the day. The Dec-24 contract traded between €57.49 and €61.05/tonne before settling at €59.44, a day-on-day gain of 65 cents. Despite the recent gains spot carbon prices are still 41% lower than the peaks seen in 2023.  

Oil Market

Oil contracts failed to build on the premium that was fed into prices on Wednesday, with the Brent front month trading as low as $82.07 a barrel. Prices were in decline as speculation was rife in financial markets that the US Federal Reserve would delay the cutting of interest rates until the second half of the year. However, the losses were soon reversed as positive news emanating from China supported prices in late afternoon. Exports from the world’s second biggest economy were 7.1% higher for January and February 2024 then year ago levels, while imports were up 3.5%. Supporting oil demand was also news that China imported 5.1% more oil in the same period, causing Brent front month to recover and close at $82.96/bbl, flat day on day.  

Markets this morning

Gas prices opened strongly this morning but have fallen off early highs. The front month traded as high as 67.27p/th but has since retreated to 65.80p/th, a mere half a penny increase on Thursday’s close. On the Summer-24 contract trading is thin with only one trade completed thus far, and that was completed at parity to last night’s close. No trades have been completed on the prompt at the time of writing. Carbon prices are showing modest gains tracking early morning trades on the TTF. Brent front crude is also showing a minor increase on last night’s close buoyed by data from the IEA showing increased demand for oil in the US.