NBP gas prices were inflated following two unplanned outages at a gas field that feeds the Langeled pipeline.

09 April 2024

Gas Market

The decline witnessed on the NBP pre and post Easter has all been reversed at this stage following large gains across the curve on Monday. Settling at 69.71p/th, just shy of the intraday high, the front month increased by 3.63p/th. Prices were inflated following two unplanned outages at the Asgard gas field that feeds the Langeled pipeline. This removed almost 20mcm from the supply mix, while a planned outage at St Fergus was extended adding further upward pressure to prices. Only one cargo of LNG is expected to dock at British ports between the 10th and 15th of April, while 12 deliveries are expected into European ports by the end of the month. LNG traders noted the current higher variable costs at UK ports as a key reason for routing to Europe.  

Power Market

Bullish movements on the NBP gas market influenced by issues with gas supplies helped to push GB baseload power curve prices higher. The month ahead contract increased by £1.70/MWh to £58.50, while the Q3-24 contract increased by 3.6%. On the prompt day ahead baseload power shrugged off the increase on the gas market, as strong wind generation on the system minimised the level of gas fired generation required. As a result, the day ahead contract shed over 10% across yesterday’s session. Carbon markets retained their upward momentum spurred on by increasing gas and coal markets. Increased buying levels yesterday was also a key driver behind the upward movement.  

Oil Market

Oil prices opened in negative territory on Monday and tracked lower across the day. The front month Brent contract declined by 79 cents a barrel, closing at $90.38/bbl, having traded below $90.00 for parts of the day. Oil prices increased by 4% over the previous week due in part to escalating geopolitical tensions. Those tensions appeared to be easing somewhat on Monday following news over the weekend Israel said it had withdrawn some troops from Gaza. In addition, there was a willingness of both sides in the Israel Hamas war to at least sit down in Egypt and discuss the possibility of a ceasefire, although it was unclear if any progress had been made.  

Markets this morning

Gas prices have fallen back from yesterday’s close in early trading this morning. Flows through the Langeled pipeline have increased day on day with some of the issues at the Asgard field rectified although up to 7mcm of capacity is still being impacted. The front month contract has shed almost a third of yesterday’s gains, while the front winter contract has also traded lower by almost a penny. Tracking gas prices, carbon has fallen, last exchanging hands at €63.25/tonne. Oil has traded higher this morning following confirmation from Israeli Prime Minister that a date had been set for the invasion of the Rafah enclave in Gaza.