April settled at 68.37p, down 3.01p yesterday

Gas Market

The Spot closed over 4.00p per therm lower yesterday as the GB gas system was well balanced with supplies still showing a surplus with just an hour of trading to go. Increased wind generation dented gas demand on the day and is expected to rise again on Friday which pressured the prompt.  Natural gas futures in the UK and Europe drew some comfort from the news of a possible increase in LNG supplies from Freeport LNG in May, and NBP contracts for the summer months yielded an average of 2.75p yesterday.  April settled at 68.37p, down 3.01p and its possible that the summer months will succumb to more pressure as the current winter season comes to an end and gas in storage for Europe remains above 59% of capacity.  

Power Market

Thursday brought a third day of losses for the GB baseload curve as futures responded to the weak gas market. The front month fell by £2.75/MWh which was the biggest decline on the day. The summer months eased by an average of £2.50/MWh which cancelled out the gains from earlier in the week.  Longer curve contracts recorded more modest losses as the Winter-2024 contract settled at £74.50/MWh, down £1.75/MWh. Wind generation out turned almost 50% more than expected yesterday and pressured prompt prices.  Baseload for the Day ahead declined by £12.20/MWh to settle at £56.00/MWh, just above the low for the month so far.

Oil Market

Crude oil prices settled down after optimistic talks for a ceasefire in the Israeli Hamas war yesterday. Crude oil prices limped sideways for much of the day and at the end of the session Brent for May delivery was just 17 cents down at $85.78 a barrel.  Talks for a break in the conflict in the Middle East to allow for humanitarian aid for Gaza continued in Egypt and Qatar yesterday. The U.S. Secretary of State believes a deal is achievable although Hamas may only consider releasing all the hostages in return for an end to the war.  U.S. gasoline inventories declined by 3.3m barrels last week while refining activity is on the rise which could be an indication that U.S. demand is picking up ahead of the summer driving season.  

Markets this morning

Gas demand is down below 200mcm for today as high output from wind generation continues to displace gas fired units from the power stack. Supplies are comfortable with a surplus of 16mcm forecast on the National Grids site. In the gas markets, the prompt is still dormant, but futures have active and early losses have turned to gains.  The front month is 1.88p per therm higher at 70.25p while the Summer-24 contract has added 1.67p to last trade at 68.50p. Brent is trading in a tight ranged this morning and the May contract is exchanging at $85.74 a barrel.