The NBP front month continues to oscillate in the low to mid 70p/th range while large scale maintenance continues in Norway

10 May 2024

Gas Market

The NBP gas market remains quite directionless with gains one day, reversed the next as the market ebbs and flows through the current spathe of maintenance on Norwegian gas fields and assets. Thursday saw a reversal of Wednesday’s losses with flows through Langeled remaining suppressed due to the continued planned outages at the Kollsnes and Troll gas fields. As a result, the front month June-24 contract increased by 0.85p pence to 75.58p/th. Day ahead and spot prices also increased across yesterday’s session, adding 0.3p/th on average due to decreasing wind speeds resulting in wind generation being more than 10% below seasonal norms. Reports from the US indicate that feedgas into the much-maligned Freeport LNG export facility have increased by over 200GWh/day over last number of days suggesting that all three liquefaction trains may be operating again.  

Power Market

The GB Day ahead baseload contract moved sideways on Thursday with falling wind speeds supporting prices. Solar output is also marginally below seasonal norms which is providing further support to prompt power contracts. On the curve, increasing NBP gas prices coupled with gains on the UKA allowance market caused an uptick in GB baseload futures. The front winter increased to £84.05/MWh representing a 5-day uptick of £2.22/MWh. EUA carbon prices continued higher through Thursday’s session with an element of profit taking from Traders. The Dec-24 contract increased by €1.76/tonne as all contracts were further supported by the increasing wholesale gas markets.

Oil Market

Oil Prices increased marginally in value once more on Thursday, with the Brent front month increasing by 30 cents to $83.88/bbl. Economic data from the East and the West increased the likelihood of rising oil demand for the remainder of 2024. Crude oil imports rose in China in the month of April compared with 2023, while exports and imports also improved in the same period for the world’s largest importer of oil. Elsewhere, the labour market in the US showed signs of cooling with the numbers of new claimants of unemployment benefit reaching the highest level in 8 months. The oil market is anticipating that a cooling labour market in the US will force the Federal Reserve’s hand to implement interest rate cuts, weakening the dollar and making oil cheaper to buy for holders of other currencies.  

Markets this morning

The recent high temperatures continue to curb demand as the UK system is almost 11 mcm long at this early stage this morning. Flows through Langeled are up by almost 50% day on day as some maintenance begins to ease in Norway. However, despite the healthy supply picture front month prices remain stubbornly above the 75.0p/th level. Oil prices are trading higher again, signalling a probable week on week gain. Crude prices are currently supported by yesterday’s economic data from the world’s two largest oil consumers, the USA and China, and the continued uncertainty in the Middle East.