NBP futures have continued to shed premium this morning

14 June 2024

Gas Market

Gas prices relinquished early gains on Thursday as contracts on the NBP curve closed almost flat or slightly higher. The front month peaked at 87.50p per therm driven by concerns of tighter global LNG supplies after Chevron’s LNG offshore plant at Wheatstone was shut down earlier in the week.  The Australian LNG producer released a statement on Thursday indicating they expect a full return for the plant by 27-June. The news seemed to calm the market as the early premium was released through the afternoon session.  The outage at Visund is still ongoing and the Norwegian gas operator, Gassco, have extended the expected resolution date out to Sunday week but still have a note on the website to indicate the outage duration is still uncertain. At the close, the June contract for the NBP was at 84.30p up 0.43p.  

Power Market 

The IFA2 interconnector from France to the UK is due to return to full capacity on Friday following a spell of down time for planned maintenance.  The increased capacity will allow less expensive nuclear power from France to the UK and pressured the Day ahead product yesterday. Wind generation is forecast to be lower than expected next week, however, this could be offset by increased solar generation. Baseload for the day ahead shed £6.04/MWh yesterday. Baseload futures tracked movement on the NBP curve and gains to carbon supported contracts at the close.  The front month settled £0.45/MWh up at £75.65/MWh. Carbon EUAs were around 0.8% higher over the session while UKAs increased by 1.7%.  

Oil Market

Crude oil prices traded lower during Thursdays morning session but with the release of the latest demand growth forecast from OPEC prices reversed direction and settled a smidge higher. The latest forecast from OPEC sees oil demand to increase to 116m barrels per day by 2045. This forecast is at odds with this week’s report from the International Energy Agency which reported oil demand will level out towards the end of this decade at around 106m barrels per day.  Crude oil prices eased earlier in the session after the release of the U.S. inventory report late on Wednesday which showed a surprise build in U.S. crude oil and gasoline stocks.  The U.S. Federal reserve also put back the possibility of interest rates cuts for the short term this week.  

Markets this morning

NBP futures have continued to shed premium after Chevron confirmed it’s Wheatstone LNG plant is expected to return to full capacity within two-weeks.  The front month for the NBP is down 1.40p to 82.90p per therm. A similar decline is showing on remaining summer months while the Winter-2024 contract is 0.83p lower at 100.40p.  Prompt prices are also in retreat this morning although trading is slow as seems normal for a Friday start.  The GB gas system is well supplied again today and demand is pitched at 137mcm.  Carbon EUAS have yielded 70 cents per tonne this morning and Brent is 22 cents a barrel lower at $82.53 a barrel.