BP futures have continued to edge higher this morning

25 April 2024

Gas Market

Curtailed supplies from Norway and forecasts for increased demand provided support to the prompt and near curve yesterday.  Issues at the Norwegian Hammerfest LNG plant which could impact up 36mcm of imports to the UK will not be resolved until Friday. Gas demand picked up yesterday afternoon which left the system short, and the prompt extended earlier gains. Most prompt products settled around 4.50p higher with the Balance of month being the outlier having settled just 1.10p up on the day. Near curve contracts had retraced earlier gains but the late rise in prompt supported the remaining summer months which settled an average of 1.50p higher.  

Power Market

The late gains to the NBP fed into the baseload power curve yesterday while carbon prices fluctuated. Gains were assessed higher on near months with the May contract adding £1.95/MWh while a little further out, the Winter contract increased by around half that amount. Carbon prices switched between gains and losses before ending the session higher. The Spot for EUAs settled at €64.94 per tonne while the Dec-24 contract for UKAs closed at £37.30 per tonne. Wind generation is forecast higher at around 8.5GW for Thursday but will still be below recent averages. The Day ahead price took its lead from gains on the NBP prompt and moved £5.18/MWh higher over the day and bringing the average price for the month to £51.07/MWh.   

Oil Market

After strong European economic data supported crude oil prices on Tuesday but it was disappointing U.S. data that weighed on prices yesterday. Manufacturing and services are down for April as the PMI compositive index in the States fell to 50.9 from 52.1 for last month.  An increase in crude oil exports over the last week dented U.S. crude oil reserves as the latest report from the Energy Information Administration showed yesterday. Crude oil stocks fell by 6.4m barrels which was more than anticipated but exports are not expected to be as high next week. Meanwhile in the Middle East, tensions between Iran and Israel appear to have eased but it looks as though Mr Netanyahu is set on progressing with a ground offensive on the city of Rafah.  

Markets this morning

A short gas system has provided early support to the NBP prompt this morning. The system has narrowed the deficit with Langeled nominations rising by 5mcm to 30mcm which accounts for all Norwegian imports to the UK today as works continue to resolve the issue at the Norwegian Hammerfest LNG plant.  Near months have also climbed in early trading with the May contract 1.40p higher at 74.01p while the Winter-2024 contract is a penny up at 90.29p. Crude oil prices have reversed early losses and Brent is 13 cents up at $88.15 a barrel.