On Tuesday natural gas prices partially retraced losses made on Monday

19 June 2024

Gas Market

The majority of Monday’s NBP losses were reversed on Tuesday, with the biggest gains observed across the near curve. News of increased capacity coming online from the Troll gas field as well as an expected end to the Nyhamna facility outage appeared to be offset by an ongoing outage at the Visund platform as well as news that import capacity into the UK via the BBL pipeline would be reduced. The front month moved up by just under a penny day on day to settle at 81.44p per therm while Winter-24 posted a day-on-day gain of 1.44p to finish out the day at 99.91p/th. NBP prompt movements were more mixed, as Day ahead shed minor value while all other prompt contracts took direction from maintenance and outage related headlines.  

Power Market

Increases across the NBP curve provided upward pressure to the GB Baseload power futures on Tuesday. The front month, July settled £1.18/MWh higher at £74.33/MWh and the Winter-24 contract posted a day-on-day gain of £0.68/MWh to close at £89.15. Gains observed in carbon markets provided further support with the UKA December-24 contract rising by 1.5% day on day. Baseload for Day ahead delivery settled almost 3% lower day on day, driven by minor losses on its NBP counterpart as well as above seasonal normal temperatures. Wind levels for the rest of the week have been revised down, however solar output is set to average more than 20% above seasonal averages, which could help to mitigate further upside.

Oil Market

Brent crude made gains for the second consecutive session following a brief hiatus from the upward momentum last Friday. Crude oil for delivery in August settled at $85.33/bbl, $7.81 higher than the lows witnessed in early June. Support on the global oil markets was garnered from the ongoing conflict between Russia and Ukraine, while tensions in the Middle East is a contributing factor. Late in Tuesday’s session an attack by Ukraine on a Russian oil terminal caused a large fire at the facility that spurred global oil prices on. In addition, comments attributed to the Israeli Foreign Minister referencing an “all-out war” on Hezbollah added further support to oil prices. The market is still keenly watching US economic data for an indication if interest rates will be cut in September.  

Markets this morning

The GB gas system has opened the day long, no doubt helped by the return of flows from the Nyhamna facility following recent outages as well as news that the Troll gas field is increasing production capacity by 7mcm per day. Despite this, the Day Ahead contract is trading 0.65p/th above its previous close, while near curve contracts are displaying downside, with the front month contract trading lower than Tuesday’s settlement at 81.30p/th. Brent prices however are in negative territory this morning, albeit to a minor extent. The front month contract is currently trading 0.39% below it’s previous close.