With Nyhamna returning from an unplanned outage the day ahead contract retreated by 6% to 79.05p/th

18 April 2024

Gas Market

Gas supplies through the Langeled pipeline into the UK increased following the return to operation of the Nyhamna gas plant. As a result of the return of Nyhamna much of the premium built up over the previous two sessions began to dissipate. The front month shed 4.7p/th at the close retreating from the four-month high’s posted on Tuesday. The contract traded as much as 5p/th below Tuesday’s close in the afternoon, and the impact of Nyhamna’s return was not only confined to the near curve. Winter-24 lost 4.19p/th closing at 93.92p/th. Further downside could have been possible but the continued risk of Israel retaliating against Iran provided some resistance to prices falling further.

Power Market

The decline on the NBP was reflected on the GB baseload curve as the May-24 contract shed £3.15/MWh closing at $66.35/MWh. On the far curve losses were extended by a decline on the UKA carbon market, as the front season lost £3.60/MWh day on day. On the prompt day ahead increased with temperatures in the UK expected to below seasonal norms increasing heating demand while a decline in forecast generation increases the reliance on more expensive thermal generation. EUA carbon prices also declined pressured by the retreating gas prices but also as a result of its own market dynamics. Currently the reduction in gas demand in 2023 across Europe and the decarbonisation of power generation is impacting demand for carbon credits.  

Oil Market

Oil prices slid lower across Wednesday’s session despite the continued uncertainty regarding the Middle East, and what Israel’s response to the weekend’s attacks might be. The market doesn’t currently expect dramatic sanctions by the US on Iranian oil, and with that in mind supply and demands fundamentals became the driving force behind Brent crude’s decline. Both the WTI and Brent front month contract’s shed over two and a half dollars as demand woes dominated proceedings. US commercial inventories rose by 2.7million barrels according to the EIA to their highest level in a year, while weak Chinese economic data increased fears of a slowdown in demand for Oil. Adding to the bearish sentiment was the likelihood of US interest rate decreases also being delayed.  

Markets this morning

The UK system is currently 16.7mcm long with flows through Langeled which is fed by Nyhamna up 39% compared to yesterday. The May-24 initially opened at discount to last night’s close and continue to trade to an early morning low of 75.92p/th. However, the contract has in the latest transaction traded marginally higher at 79.09p/th. The prompt market has yet to trade at this point this morning. Oil prices are down marginally stabilising after yesterday’s decline with global demand still a concern. The Dec-24 EUA contract traded down to a low of €68.21/tonne this morning, extending yesterday’s losses.