Friday’s late declines have continued into this morning’s session with near NBP months down a further 2.25p on average

Gas Market

The restoration of gas flows from Norway returned comfort to the UK gas market on Friday afternoon as prompt and near futures yielded most of the premium added over the previous two sessions.  Near futures had ticked up due to curtailed gas flows from Norway on Wednesday and Thursday with May adding 3.43p per therm over the two days. On Friday, gas prices had opened firmer with May peaking at 77.00p before flows from Norway increased but the front month then fell by 5.13p intra-day to settle at 71.87p which brought the decline for the week to 5.53p. Forecasts for temperatures to rise above the norm for the week ahead combined with increased wind generation pressured the prompt and the Day ahead product for Monday settled almost 3.00p down.

Power Market

The reversal in direction on the NBP curve played into the baseload power market on Friday as near months fell by over £2.00/MWh. Losses were concentrated at the front of the curve as contracts from next summer out were assessed less than £1.00/MWh down.  The May contract settled at £61.40/MWh and with Fridays decline was £3.35/MWh down for the week.  Forecasts for increased wind generation pressured the Day ahead product. Carbon prices eased on Friday in line with general movement in the gas markets. The Spot for EUAs fell by €1.50 per tonne to €65.03 per tonne while contracts for 2024 and 2025 shed around €1.00 per tonne.

Oil Market 

Tensions in the Middle East provided support to crude oil prices on Friday, but gains were capped by a stronger dollar.  Israel ramped up air strikes on Rafah on Thursday night as they prepare the way for a ground offensive and continued to bombard the city on Friday. The dollar increased against a basket of currencies on Friday following the confirmation that U.S. inflation for the 12 months including March was up 2.7%.  This also ended hopes that Fed will cut interest rates at the next monthly meeting and is likely to until later in the year as inflation is moving away from the target of 2.0%.  Brent ended the session with a gains of 49 cents to settle at $89.50 a barrel but over the week, the global benchmark added $2.21 a barrel.

Markets this morning

Friday’s late declines have continued into this morning’s session with near NBP months down a further 2.25p on average. The front month has traded below the 70.00p mark with the latest trade at 69.60p while a little further out the curve, the Winter-2024 contract has yielded around 2.00p in early exchanges. Prompt prices are also showing weakness with the Day ahead product also threatening to go below the 70.00p mark.  GB gas demand is well down at 149mcm for today due to a tick up in temperatures and a rise in wind generation. Carbon EUAs are down by around 2.2% or an average of €1.50 while in the crude oil markets Brent is 62 cents lower at $88.88 a barrel.