The NBP forward market oscillated in a tight range for much of Tuesday’s session, as contracts moved sideways following Monday’s strong losses.

13 March 2024

Gas Market 

The NBP forward market oscillated in a tight range for much of the session, as contracts moved sideways following the strong losses witnessed on Monday. The front month April, traded to a low of 61.02p/th in early trading but soon recovered, trading for much of the session in a half penny range either side of Monday’s closing price. The contract eventually closed 0.13p/th higher at 62.50p/th. Summer-24 followed a similar path as it also teetered either side of Monday’s close before being assessed at 62.35p/th, essentially flat day on day. The Day ahead contract buoyed by an early oversupplied market shed 1.25 pence as it closed the day at 62.75p/th. The Within day contract posted similar losses as rising temperatures impacted on gas demand, and supplies recovered following minor outages in Norway.  

Power Market

GB baseload contracts edged sideways tracking the minor movements on the NBP gas market. The UK government stated the need for the country to build new, or refurbish existing, gas fired generation to ensure against blackouts in the future. Despite efforts to shift to an electricity system supplied by mostly nuclear and renewable generation, the UK Energy Minister recognised the need for gas fired generation as a reliable back up. On the carbon market, a similarly flip flopping TTF gas market caused the Dec-24 EUA contract to backtrack on early losses and post modest gains of 40 cents to close at €56.60/tonne. There were also reports of profit taking by traders once the contract moved into positive territory.  

Oil Market

For the second consecutive day oil prices edged sideways, as markets unwound the minor gains from Monday. The Brent contract for delivery in May declined by 29 cents following Monday’s modest 13 cent gain, to close at $81.92 a barrel. US consumer prices increased in the month of February, validating the Federal Reserve’s recent decision to not adjust US interest rates prior to June. High interest rates can negatively impact on oil demand, however, OPEC+ have doubled down on their recent forecast for strong growth in global oil demand in 2024 and 2025. Giving support to prices, the report remains unchanged on oil demand from last month but did increase its forecast for economic growth that could bolster oil demand further.  

Markets this morning

The system has again opened marginally long this morning. by 3mcm. Flows from Norway are consistent with Tuesday’s flows, with temperatures and subsequent heating demand also similar day on day. On the traded markets prices are trading sideways in early trading. The front month April-24 contract is up by 0.32p/th at 62.82p/th, while summer-24 has traded higher by 1.15p/th. Carbon markets are also marginally higher, with the Dec-24 contract last exchanging hands at a gain of 26 cents against Tuesday’s close. Front month Brent is trading higher this morning with the market focussing on the OPEC+ forecast of increased global oil demand.