The May contract for the NBP last traded at 79.30p per therm which is an intra-day loss of 5.24p this morning

Gas Market

Wednesday’s losses failed to be consolidated yesterday as the market eyes next weeks planned maintenance works on Norwegian feeds and lower wind forecasts while concerns over geopolitical tensions remain.  It was a jittery session as losses to near NBP futures were reversed over the morning session and contracts oscillated between gains and losses before moving higher from late morning.  If the war in the Middle East escalates it is possible that Iran could block the Strait of Hormuz, the gateway to the Suez Canal, delaying delivery times or even threatening LNG exports from Qatar to Europe altogether.  Several Norwegian plants have maintenance works scheduled to start over the weekend and run into next week while gas demand is expected to rise due to lower wind forecasts.

Power Market

GB baseload futures tracked the gas and carbon EUA markets higher on Thursday. The front month gained £0.85/MWh while the Q3-2024 contract saw the greatest gain of the day settling £1.88/MWh higher at £72.10/MWh. Wind generation is expected to remain above recent averages on Friday and this pressured the Day ahead product which settled at £44.50/MWh. Next week the renewable power source is expected to fall below seasonal norms.   Carbon EUAs also tracked the turnaround in the gas market yesterday as the Spot settled at $69.57 per tonne, gaining €1.24. Contracts for 2024 and 2025 rose by 1.6% or an average of €1.18 per tonne yesterday.  

Oil Market

Crude oil prices continued to edge lower yesterday with Brent racking up its fourth decline in a row.  While losses were modest, the market seems comfortable that tensions in the Middle East will not increase although a response from Israel for the attacks by Iran last weekend is expected.  The front month for the global benchmark has fallen by $3.34 a barrel this week as the premium for geopolitical risk is unwound.  Also weighing on prices this week has been poor economic data from the U.S. and China with the U.S. Fed expected to delay lowering interest rates until the second half of the year. Officials at China’s central bank have said there is still some scope to support their economy after initial results for March are not looking as positive as the previous two months.  

Markets this morning

There are reports that Israel attacked a military base near the city of Isfahan in Iran. Initial information suggests the attack was a measured response designed not warrant any retaliation or escalate the conflict further. NBP futures opened higher this morning with the front month peaking at 84.54p but the gains have been reversed with May last trading at 79.30p which is an intra-day loss of 5.24p. Losses are also visible on the carbon screen with EUAs down by €1.65 per tonne on average.  Brent rose by $3.64 to peak at $90.75 a barrel this morning but the June contract is now just 49 cents up at $87.60 a barrel on the last exchange.