The decline on the NBP market continues this morning as Norwegian gas supplies continue their recovery

10 June 2024

Gas Market

As had been indicated by the trades following settlement on Thursday, NBP contracts all traded lower across Friday’s session. Repair work on the Sleipner Riser platform was completed as scheduled, and the Nyhamna processing plant returned to operations. As a result, gas flows from Norway via the Langeled pipeline returned, peaking at a rate of 44.2mcm/day, increasing from 0mcm on Thursday. The prompt gas contracts also declined, as the increasing Norwegian flows weighed on the Day ahead and weekend contracts. The Day ahead contract for delivery Monday fell to 78.05p/th, with the weekend contract only marginally higher at 78.25p/th. The impact of the losses on the prompt and near curve rippled across the far curve as the winter-24 contract fell to 96.50p/th, a three-week low.

Power Market

The weakness on the NBP gas market filtered through the GB baseload curve as all contract out to winter-26 declined in value. Winter-24 declined for the fourth consecutive session as it settled at £87.25/MWh. On the prompt the Day ahead contract increased by £7.50/MWh, with the reduction in capacity int he UK France interconnector one of the contributing factors. With the import capacity limited GB cannot benefit from cheaper French Nuclear power. The Dec-24 EUA contract declined in trading on Friday. The contract traded to its intra-day low of €71.01/tonne early and failed to move far from this level for the rest of the day, closely tracking movements on the European TTF gas market.

Oil Market

Oil prices crept lower on Friday, for a third consecutive week of losses on global traded oil markets. The Brent front month fell by 25 cents to $79.62/bbl while the West Texas Intermediate lost a mere 2 cents as it settled at $75.53/bbl. Last week, oil contracts recovered some of Monday and Tuesday’s losses following positive economic news from the US and the ECB’s interest rate cut. Adding to the upward momentum was assertions by OPEC+ that the increase in production discussed at their meeting on the 2nd of June was not set in stone and could be reversed if global oil demand did not recover. However, Friday saw oil contracts decline in value with the latest job data from the States tempering hopes for an interest rate cut by the Federal reserve in September.  

Markets this morning

The decline on the NBP market continues this morning as Norwegian gas supplies continue their recovery following last week’s issues. Total Norwegian exports into the UK market are 22mcm higher than Friday with the UK system marginally oversupplied as a result. The front month last traded at 76.62p/th, an intraday low thus far. The Brent front month contract is flat this morning with hopes of a recovery in demand vying with a strengthening dollar and interest rate hopes for control. EUA carbon contracts are tracking early gas movements with the Dec-24 last trading at €69.56/tonne, a loss €1.79 from Friday’s close.