Brent burst through the $90 a barrel mark on Thursday

05 April 2024

Gas Market

The energy markets corrected yesterday following the significant move lower from the end of last week.  With Brent crude settling above the $90 a barrel mark for the first time since the end of October, gas and carbon prices edged higher. The May contract for the NBP declined by 6.42p over the previous three sessions and settled 1.70p up at 64.84p on Thursday.  Contracts from the winter out ended the session just over a penny higher. On the prompt, all contracts recorded modest gains save for the Day ahead product which settled slightly down with forecasts for higher wind generation expected to temper gas demand on Friday.  

Power Market

The correction seen in European gas and carbon prices was mirrored in the GB baseload curve yesterday. Near months settled an average of £1.45/MWh higher on the day with May, the front month closing at £55.25/MWh. A three-day losing streak was also snapped in the Carbon market as UKAs rose by over 5.0% while EUA contracts out to 2026 added 1.5% on average. The Spot for EUAs settled €0.86 higher at €56.87 per tonne. There was a steep reduction in the Day ahead contract on Thursday as wind generation was forecast to increase by over 50% for Friday. At the close, baseload for the Day ahead was £18.79/MWh down at £42.71/MWh.  

Oil Market

With geopolitical tensions remaining high and supply concerns mounting Brent burst through the $90 a barrel mark yesterday and settled at its highest level since 20-Oct-2023 which was two weeks after the Hamas attacks on Israel. Brent’s highest settlement price following the start of the war was $92.38 a barrel and the front month contract peaked at $91.30 a barrel yesterday before going on to settle at $90.65 a barrel with a gain of $1.30 a barrel day-on-day. Yesterday was the fifth gain in succession for the global benchmark and crude oil prices could rise further as Eurozone inflation rates fell by more than expected for March fuelling anticipation for interest rate cuts.  

Markets this morning

The Spot for the NBP is trading lower this morning as gas demand is forecast lower at 173mcm while supplies are long by 24mcm.  The front month, May, has opened higher and peaked at 66.11p per therm but is almost flat on the last trade at 65.17p. Only the summer months along with the Winter-24 contract have been active at the time of writing and all products have retreated off the morning high.  Crude oil prices are flat, but Brent remains on target to post its second weekly gain as the June contract exchanges at $90.70 a barrel.