Nyhamna outage is due to be resolved on Wednesday

Gas Market

The outages at Nyhamna and Dvalin are due to be resolved on Wednesday but still caused concerns to the market on Tuesday. The valve issue at Nyhamna removed up to 56mcm from Norwegian supplies and provided early support to the prompt and near curve. The front two months settled at four-month highs and posting the largest gains on the day were the May and June contracts, which added 5.35p to settle at 82.85p and 82.10p respectively.  Gains diminished further along the NBP curve as futures past the winter added less than 3.00p. On the prompt, the Spot and Day ahead products added 5.55p and 6.75p, closing at 83.40p and 84.15p while the Balance of month product added 8.95p.

Power Market

The sharp rise in near month contracts on the NBP was reflected in the GB baseload market.  The front months added over £4.00/MWh yesterday bringing the gains for the last five days to over £10.00/MWh on average.  Higher carbon was a factor too as short covering encouraged prices to rise.  The Dec-24 contract for EUAs gained 5.6% or €3.94 to close at €74.11 per tonne. Baseload for the Day ahead almost doubled yesterday as the contract closed higher in tandem with gains on the NBP prompt and forecasts for wind generation to decline. Wind generation has averaged 17.8GW over the last week and is expected to fall below those levels for a few days.  

Oil Market

The crude oil markets remained subdued on Tuesday, weighing up the Iranian attacks on Israel at the weekend and whether a further response will come from Israel.  Israel’s war cabinet is due to meet on Wednesday to discuss further actions, but Western allies have tried to cool temperatures in the area with talks of imposing sanctions on Iran. Countering the geopolitical risk, was disappointing U.S. data which has led the U.S. Federal Reserve Chair, Jerome Powell to say their monetary policy needs more time to get inflation to the target level of 2.0% and the markets took this to mean interest rates cuts may be pushed back to later in the year.  At the close, Brent for June delivery was 8 cents down at $90.02 a barrel.  

Markets this morning

The GB gas system is forecast to run 7mcm long against today’s demand of 198mcm.  Langeled nominations for the day have picked up to 56mcm which is an increase on yesterday and an indication that the Nyhamna issue has been resolved. NBP futures have eased this morning with May down 2.17p on the last trade and seems to be meeting resistance at the 80.00p mark as the low of the day was 80.16p for the front month.  A little further out, the Winter-2024 contract has declined by 2.38p to 95.72p.  Carbon EUAs for Dec-2024 and Dec-2025 are down by over €1.50 per tonne and in the crude oil markets, Brent is marginally lower at $89.84 a barrel.