The gas markets have continued to show weakness this morning

Gas Market 

Reports emerged on Friday morning that Israel had attacked a military base in Isfahan, Iran and the energy markets opened stronger.  But as further information about the attack was released it appeared that the missile strikes were restrained so as not to warrant a response.  The Iranian foreign Minister played down the attacks on the morning which seemed to dampen fears of an escalation in the war.  NBP futures reversed the early losses and continued to ease through the session. The May contract settled at 77.40p per therm, declining 3.81p on the day but was down 7.14p intra-day from the high of 84.54p.  The Winter-2024 contract lost 2.90p on Friday which left the front season flat for the week.  Prompt prices also settled lower on the day with the Spot and Day ahead products down by 2.00p and 2.85p respectively.  

Power Market

The week ended with baseload futures in decline as the market responded to weaker gas and carbon on Friday.  The front month, May, shed £2.45/MWh to close at £64.75/MWh which left the contract unchanged week-on-week.  The Winter-2024 contract settled at £83.00/MWh having declined £1.13/MWh from Thursdays close.  Carbon EUAs for 2024 and 2025 fell by over 4.0% or an average of €3.08 per tonne. Wind generation is forecast to fall well below recent averages for Monday which provided support to the prompt.  Baseload for the Day ahead settled at £76.81/MWh and forecasts for wind for the week ahead are below seasonal averages and likely to underpin prompt prices this week.  

Oil Market 

Brent for June delivery ended the week with a modest gain of 18 cents on Friday but was down $3.46 a barrel intra-day after Iran played down the reported attacks by Israel.  The global benchmark rose sharply after reports emerged that Israel had retaliated to the Iranian strikes from the previous weekend.  The muted scale of the reply suggested that Israel was hoping not to escalate the war and the gains in crude oil prices were pared back over the session. A lot of the geopolitical risk premium had been unwound earlier in the week and the global benchmark settled down $3.16 a barrel week-on-week.  

Markets this morning

GB gas demand is forecast higher at 217mcm for today to counter for lower wind generation in the power stack.  Gas supplies are robust with the National Grid showing a 26mcm surplus while Langeled nominations for today are close to capacity at 72mcm. The gas markets have continued to show weakness this morning as near NBP futures are down by over 2.00p per therm.  Prompt prices have also eased with the Day Ahead product down by a penny to 76.00p.  Brent has continued slide and the June contract is 78 cents down at $86.51 a barrel.