Near NBP futures rose by an average of 2.75p per therm yesterday

Gas Market

After some uncertainty in the morning NBP futures ticked up in the afternoon and erased the losses for the last week.  European energy prices edged higher in the afternoon after reports that Ukraine had attacked a Russian nuclear power plant. Although only a boundary fence was struck NBP futures rose by an average of 2.75p per therm. There has been no news of the Freeport LNG facility returning to full capacity after a motor issue shut down one of the trains for February.  The Texas based company issued a statement at the end of February saying they expected a further delay of around two weeks which would make the return of full operations in mid-March.  Low demand has pressured gas prices on the far side of the Atlantic and the May contract settled at 14.66p per therm yesterday and this plus transport costs of 21.84p per therm make it profitable to ship LNG to Europe.  

Power Market

The afternoon hike in gas prices feed into the baseload power curve yesterday.  Near months gained an average of £2.70/MWh while longer curve contracts settled around £1.70/MWh higher. Carbon EUAs responded to bounce in energy prices as the Spot closed at €56.70 per tonne, the highest settlement for a week. Contracts for 2024 and 2025 gained around 5.2% or around €3.00 per tonne. Baseload for the Day ahead moved in the opposite direction yesterday with forecasts for wind generation to remain above the seasonal norm on Friday.  The contract settled £2.59/MWh down at £57.91/MWh which is almost £5.50/MWh below the average for the month.  

Oil Market 

The latest report from the International Energy Agency gave a boost to crude oil prices yesterday as Brent settled at its highest level in over four months. The report pointed to a tighter supply market as the group increased its forecast growth for global oil demand in 2024 by 110,000 barrels per day to 1.3m barrels per day while also lowering its supply forecast for the year. Support for crude oil prices also came from Ukraine’s attacks on Russian refineries which continued yesterday.  Brent for May delivery settled at $85.42 a barrel up $1.39 a barrel while the April contract for the U.S. benchmark, West Texas Intermediate, added $1.59 to close at $81.26 a barrel.

Markets this morning

The gas markets are reasonably flat this morning with latest trades for near months showing minor increases. April has traded in a tight range between 65.03p and 66.50p so far and the latest trade has gone through at 66.00p. A strong performance from wind in the UK power stack along with mild temperatures has seen gas demand fall to 182mcm this morning and supplies have a healthy surplus. In the crude oil markets, Brent is still on target to post a weekly gain despite being 46 cents a barrel down this morning.