Near NBP futures gained an average of 2.70p on Wednesday while the Spot and Day ahead products increased by 2.97p and 2.68p respectively

13 June 2024

Gas Market 

Concerns of tighter LNG supplies continued to prop up NBP futures for the remaining summer months yesterday while the prompt reacted to gains on the Dutch TTF as the unplanned outage at Visund restricts supplies to the Netherlands.  An extended heat wave in Asia has increased demand for LNG while supplies from Australia’s LNG provider Chevron at Wheatstone have been suspended for repairs. Very little detail has been released about the issue save for it could take a couple of weeks to be resolved. Uniper, the German energy company announced its termination of gas supply contracts with the Russian supplier Gazprom Export yesterday which added some upside to prices across Europe.  At the close, the July contract for the NBP had added 2.79p per therm while the Winter-2024 product was up by 2.22p.

Power Market 

GB baseload power futures found support in the rising NBP curve yesterday as the front month settled up £1.85/MWh at £75.20/MWh. The Winter-2024 contract settled at £89.65/MWh which is £4.25/MWh below the recent high in the last week of May.  Gains on the day were tempered by a subdued carbon market as EUA options are due to expire at the end of the month. The Spot for EUAs was 5 cent up at €68.92 per tonne while UKAs settled around 1.0% higher yesterday. Baseload for the day ahead reversed some of the previous session’s gains on Wednesday despite reports of an outage of EDF’s Hartlepool reactor. The 620MW unit will be off line for the next week and a half and should ramp up to full capacity by 26-June.  

Oil Market

Wednesday brought a third day of increases for crude oil prices with expectations that global oil inventories will decline over the summer.  The International Energy Agency and the Organization of Petroleum Exporting Countries in their latest monthly have forecast crude oil stocks will dwindle over the summer months which could support prices in the back half of the year. Having said that, the latest inventory report from the Energy Information Administration showed U.S. crude oil reserves were up by 3.7m barrels last week and gasoline stocks rose by 2.6m barrels when the market was expecting a drop in inventories due to the summer driving season. A weaker dollar also added to the upside yesterday as Brent settled at $82.60 a barrel, its highest close this month.  

Markets this morning

Fundamentals in the gas markets remain healthy this morning but sensitivity over LNG concerns along with the outage at Visund continue to provide support to prices. The front month traded to a high of 87.08p per therm this morning but latest trades have seen the early premium being slowly eroded and the latest trade has gone through at 85.67p.  Prompt prices are a touch higher too despite the GB gas system showing a healthy surplus of 18mcm over today’s forecast demand of 134mcm. Yesterday’s surprise increase to U.S. crude oil and gasoline stocks has halted the rebound in crude oil prices and Brent is 49 cents down at $82.11 a barrel.