Gas Market
NBP prices declined marginally in what appeared to the casual onlooker a benign market, but the day-on-day movements were not a true reflection of the market. In early trading news of an unplanned outage on the Kollsnes processing plant caused markets to spike, with the front month contract reaching an intra-day high of 84.55p/th. However, as the extent of the outage became apparent, with only 23mcm being removed from supply, some comfort returned to the market as it posted a day-on-day loss of 1.09p/th that hid the almost 5.00p/th intra-day swing between the highs and lows. Day ahead prices also declined by 1.00 p/th with demand expected to fall due to rising temperatures for the rest of the week and into the first week of June. The decline was limited by the unplanned outage at Kollsnes and further planned maintenance at Norwegian gas assets.
Power Market
The fall on the NBP pressured GB baseload prices as all contracts declined from Friday’s closing assessment. Adding further pressure to the far curve was a 2% fall in UKA’s resulting in a £1.38/MWh decline in the winter-24 baseload contract as it settled at £91.00/MWh. The day ahead market was also in decline, posting a loss of £4.25/MWh reflecting not only the fall on the NBP prompt markets but also the forecast of improved wind speeds to above seasonal normal levels.
The EUA carbon market declined on Tuesday tracking the weak TTF gas market lower. The movement since last Friday saw the Dec-24 shed €1.10/tonne despite a slight increase on Monday in thin trading due to the UK bank holiday.
Oil Market
Global oil prices increase continued their recent recovery with a gain of 98 cents a barrel Monday followed by an increase of $1.00/bbl to €84.08/bbl on Tuesday. The OPEC+ meeting is scheduled to be held on the 2nd of June with expectations that it will maintain its current supply cuts a price supportive factor for global oil prices. Adding further support to prices was the weakening of the dollar over the course of the day. A weak dollar results in crude being cheaper to buy for holders of other currencies and can support demand. On the demand front, Monday’s Memorial Day marked the beginning of the annual driving season with expectations of an increase in demand for gasoline and as a result, crude oil in the States.
Markets this morning
Movements on the NBP are mixed this morning with the Jun-24 contract marginally lower, with all other contracts posting early morning gains. The outage at the Kollsnes plant had been expected to be resolved this morning, however it has lingered on. The impact is considerably less than yesterday with the offline capacity now reduced to a mere 5mcm of capacity of the facilities 116mcm. Oil continues to march upwards with support coming from the expected continuation of the supply cuts, and an anticipated fall in US stocks ahead of official reports.