Crude oil prices eased for a second day yesterday

10 April 2024

Gas Market  

The unplanned outage at the Asgard is due to be resolved on Wednesday but capped losses to near NBP months yesterday.  Early losses were reversed yesterday before easing again later in the session. Reports came through in the afternoon that Freeport LNG had ramped up natural gas intake on Tuesday morning which increased U.S. gas prices by 2.0% yesterday. U.S. gas prices remain weak due to low demand and the increased intake at the Texas LNG facility raised the possibility that the plant would return to full capacity ahead of schedule.  The front month for the NBP curve settled 1.71p lower at 68.00p while the winter contract yielded almost a penny to close at 85.32p.  Prompt prices also weakened yesterday as the GB gas system had a comfortable surplus an hour before the market closed.

Power Market

Lower gas prices weighed on the GB baseload power curve on Tuesday however losses were tempered by increases to carbon EUAs. The front month eased by just £0.13/MWh while further along the curve, the Winter-24 contract declined by £0.75/MWh to settle at £77.00/Wh. Carbon EUAs settled higher for a fourth day yesterday as the Spot settled at €62.12 per tonne. UKAs moved in the opposing direction and declined by 2.0% on average. Baseload for the day ahead settled flat yesterday. Wind generation is forecast to fall below recent averages on Wednesday but pick up again going into the weekend.  The East-West interconnector between Ireland and the UK will be offline for maintenance next week from Tuesday to Friday.

Oil Market

Talks of a ceasefire in Gaza ended in Cairo yesterday with Hamas to study the offer before an official response is made.  The Israeli offer made with the help of mediators from Qatar and Egypt is said to fall short of meeting Hamas’s demands but the fact that both sides are still open to talks is seen as a positive. Crude oil prices fell for a second day with Brent for June delivery losing almost a dollar to $89.42 a barrel. Concerns of tighter supplies limited losses on Tuesday as reports that Pemex, Mexico’s state-owned oil company would reduce exports for May by 330,000 barrels per day. The company has already committed to cutting exports for April by 436,000 barrels per day.  

Markets this morning

The fall in wind generation has seen GB gas demand rise above 200mcm for today.  Supplies are a touch shy but nominations through the Langeled are back above 70mcm for today which indicates the issue at the Asgard field has been resolved.  Prompt prices are flat while near months for the NBP are retracing earlier gains. May is just 0.44p up at 68.44p having traded up to 69.96p earlier.  The remaining summer months are averaging gains of around 0.30p and contracts past this have yet to trade. In the crude oil markets, Brent is 28 cents up at $89.70 a barrel while carbon prices are also a touch higher.