Brent set a fresh four-month high, closing at $87.38 a barrel

20 March 2024

Gas Market

After the significant step up in gas futures on Monday the near NBP curve moved sideways yesterday after sentiment switched back to the fundamentals.  European gas in storage is just below 60% and on target to remain above 50% by the end of the winter. LNG deliveries have continued to arrive at European ports and a further four shipments are expected at UK ports by the end of the month.  Mild temperatures are forecast for the rest of the month and wind generation is expected to remain at or above the seasonal norm. At the close of play yesterday, April was 0.44p higher at 73.70p while the Summer-2024 contract settled at 72.24p, adding just 0.15p.  The prompt was mixed as the Day ahead product shed 0.28p while the Spot added 0.58p.  

Power Market

Unlike the NBP curve, GB baseload futures eased on Tuesday with pressure arriving from significant losses to Carbon UKAs.  The April contract shed £0.25/MWh but longer curve contracts declined by over £1.00/MWh on the day.  While Carbon EUAs’ settled mixed yesterday UKAs declined by over £2.30 per tonne with the Dec-2024 contract closing at £36.01 per tonne. The decline in wind generation propped up the baseload prompt yesterday as the Day ahead contract added £9.80/MWh. Wind generation fell below recent averages yesterday and is expected to remain below 5.0GW for Wednesday.  

Oil Market

 Brent settled at its highest close since the end of October yesterday as the global benchmark consolidated Mondays gains. The market remains concerned about Russian refinery capacity after recent attacks by Ukraine targeted Russia’s energy infrastructure. China’s factory output and retail sales were ahead of projections for January and February and raised hopes the economy could finally be heading for a recovery however the property sector is still weak.  The May contract for Brent was 49 cents up at $87.38 a barrel while West Texas Intermediate for April delivery settled at $83.47 posting an increase of 75 cents a barrel.  

Markets this morning

The gas markets have opened lower this morning although early losses are modest.  The front month for the NBP curve, April, is down almost a penny to 72.77p while the Summer-2024 contract has eased by 1.52p, last trading at 70.72p. On the prompt, both the Spot and Day ahead have eased by over 2.00p as the market shrugged off a short gas system with demand pitched at 209mcm for today.  Crude oil prices have eased this morning with a strong dollar weighing before the U.S. Federal Reserve Chair’s announcement later today.  The market is hoping for a timeline on interest rate cuts to be revealed.