Gas prices continued to decline with the return of the Nyhamna processing plant confirmed.

Gas Market 

Gas prices continued to decline in the latter half of Wednesday’s session following a period of sideways trading in the morning. Further confirmation Wednesday afternoon of the return of the Nyhamna processing plant following the completion of repairs at the Sleipner Riser platform helped prices ease lower. Norwegian system operator confirmed that 35 mcm of capacity at the plant would return over the course of Friday and the weekend, and that 75% of the Easington facility, where the gas lands in Britain, would also return. As a result of the positive news, the Jul-24 declined to an intraday low of 78.93p/th before settling 0.41p higher. Day ahead also declined although prices stubbornly remain above 80p/th with the scaled return of the Nyhamna plant a supporting factor.  

Power Market

The continued decline on the NBP gas market pressured GB baseload contract lower for the second consecutive session. The front month contract fell by £2.50/MWh to £73.00, while on the far curve contracts were also pulled lower by a further 2% fall in UKA carbon allowance prices. The Day ahead baseload contract gapped higher increasing by £14.00/MWh with prices buoyed by an increase in demand due to cooler temperatures forecast for Britain. The EUA carbon market followed a similar trajectory to European gas hubs, trading marginally lower in early exchanges before falling in late afternoon. Spot carbon is now at its lowest point since mid-May following yesterday’s decline.

Oil Market

Oil prices rebounded on Wednesday following five consecutive days of losses. Economic data from the US boosted hopes of the Federal Reserve cutting US interest rates later in the year. Brent crude for delivery in August increased by 89 cents to $78.41/bbl following a jump in the Purchasing Managers Index in the US from 49.4 in April to 53.8 in May. A figure above 50 indicates a sector in a growth phase, increasing the hopes that demand will improve in the world’s largest consumer of oil. All eyes now on the upcoming release of unemployment and wage data later in the week. Global crude oil gained in value despite a build in crude, gasoline and distillate stocks in the US according to the latest data from the Energy Information Administration.  

Markets this morning

Gas prices have rebounded in early trading following the last two sessions of losses. The latest front month trade is marginally higher than last night’s close at 80.37p/th but is trading down from earlier highs of 81.65p/th. The UK system is slightly undersupplied as the market eagerly awaits an increase in Norwegian flows from Friday. Global oil markets have moved sideways trading close to yesterday’s settlement. The market is awaiting the release of further economic data and anticipating an interest rate cut in the US that is supporting prices despite immediate demand concerns.