Unexpected issues at the Sleipner Riser Platform has removed 72.5mcm of gas from European Supply

04 June 2024

Gas Market

The front month gas contract has increased by 2.32p/th over the course of the last two traded sessions. Prices declined on Friday with the planned maintenance scheduled to come to an end, and only 2mcm of maintenance expected for this week. However, Monday saw Friday’s losses reversed, and additional risk premium fed into the NBP. Impacting on the market was the unexpected return of issues that caused Nyhamna processing plant to shut down, almost exactly a year since an issue caused the then front month price to spike by over 16.00p/th. The latest issue linked to Nyhamna is a crack in a pipeline at the Sleipner Riser platform that receives gas from the processing plant. The duration is currently unknown, and although the price spike is unwelcome, the magnitude at 5.29p/th is considerably less than a year ago. During the session prices for Jul-24 traded as high as 94.00p/th, before falling to 87.12p/th at the close.  

Power Market

GB Baseload contract increased in trading on Monday following minor losses last Friday. The power futures tracked the gains on the NBP gas market as prices reacted to news of an outage at the Sleipner Riser platform impacting on gas flows to Europe. Gains were more pronounced on the near curve where the Jul-24 contract increased by £3.00/MWh and winter-24 gained £1.70/MWh. Further out the summer-25 contact closed at £81.55/MWh, a mere 30 pence gain from Friday. In a similar market, carbon prices too gained in value on Monday pushed higher by events on European gas hubs. The Dec-24 contract soared to an intraday high of €77.81/tonne, before premium fell out of the market in the afternoon, and it settled at €74.60.  

Oil Market

Global oil prices tumbled in trading yesterday following the OPEC+ meeting on Sunday. Last week had seen prices steadily decline on the back of weak demand and the expectation that the OPEC+ supply cuts would continue for the remainder of the year. However, the market was unprepared for the complicated announcement on Sunday following the oil producers meeting. The outcome of the meeting was the confirmation of the supply cuts continuing into 2025 but there is an opportunity for 8 members of the group to unwind their cuts and increase production form October onwards. Brent front month contract for delivery in August fell to $78.36/bbl, settling below $80/bbl for the first time since the beginning February.