Gas Market
Friday’s losses continued into Monday, with the most significant price falls observed across the Q3-24 period. The downside was largely driven by weakness in coal and carbon markets as well as storage fullness levels reaching 72%, which is well above the 5-year average. The front month closed the day at 80.52p per therm while Winter-24 fell by 2.03p day on day to bring the contract back down to sub-100p/th levels. On the prompt, prices also showed weakness, with forecasts of higher-than-normal temperatures for the rest of the week weighing on contracts and mitigating risk from reports of unplanned outages at the UKCS, as well as planned maintenance at the Dragon LNG facility scheduled for Wednesday and Thursday.
Power Market
A fall in NBP futures weighed on the GB baseload power curve on Monday while carbon prices moved in opposing directions yesterday. The front month, July settled £1.60/MWh lower at £73.15/MWh and the Winter 2024 contract closed at £88.48/MWh down £1.28/MWh. Carbon EUA contracts out to 2026 eased by an average of 0.5% or 35 cent per tonne, while UKAs added 1.05% to move to eight-month highs.
Baseload for the Day ahead settled marginally higher yesterday. Temperatures for the remainder of the week are now forecast a couple of degrees higher which may add to the air conditioning load while lower wind speed forecasts should be countered by increased solar.
Oil Market
On Monday Brent crude oil increased by a modest 2% on Friday’s close, with gains driven by expectations of rising oil demand from OECD nations over the coming months and lower European Central Bank (ECB) interest rates which could also elevate demand levels. Heightened tensions in the Middle East also contributed to the upside amid concerns of disruptions to oil flows. Weak Chinese economic data hampered further gains, with concerns growing that China may not hit their GDP growth target of 5%. The front month contract for Brent gained $1.63 to close at $84.25 a barrel while the U.S. benchmark, West Texas Intermediate settled at $80.33 which as an increase of $1.88 a barrel.
Markets this morning
GB gas demand is down around 5mcm from Monday’s level and the system is showing a comfortable surplus this morning. Prompt prices have ignored this with the Day ahead product up almost a half a penny ahead of planned maintenance works at the Dragon LNG facility for tomorrow and Thursday. Near futures are oscillating between losses and gains with little momentum to push prices in either direction so far. The front month last exchanged at 80.85p per therm which is less than a half a penny up on last night’s close. In the crude oil markets, Brent has retreated off yesterday’s seven-week high and is currently trading just under $84.00 a barrel.
