NBP futures moved sideways on Monday for the most part

Gas Market

NBP near curve contracts moved in tandem with the Spot on Monday to largely trade sideways. Upside on the prompt was driven by news of unplanned outages taking place on Norway’s Dvalin and Visund platforms which were set to remove more than 20 mcm per day of capacity. A short system added further upward pressure with the GB system forecasted to finish the day 3.1 mcm undersupplied. Marking the start of its final week as the front month contract, July-24 posted a gain of just 0.54p to close the day at 79.69p per therm. Confirmation on Monday that the Chevron operated Wheatstone LNG export facility in Australia had resumed full production over the weekend did little to soften near curve contracts, with this news likely offset by reports that Norway’s Hammerfest LNG plant had halted all output after an electrical issue over the weekend. The winter-24 contract closed the day at 99.47p, an increase of just 0.12p.

Power Market

During Monday’s morning session baseload power prices oscillated between losses and gains before finding direction from rising gas futures on the near NBP curve late in the session. A rally in carbon UKAs just before the close also provided support.  The July contract posted a modest gain of £0.52/MWh to close at £72.25/MWh while the Winter-2024 contract settled at £87.98/MWh, up £0.30/MWh. Baseload for the Day ahead increased yesterday with latest forecasts revising wind speeds lower for the remainder of the week. Carbon UKAs made a late rally and the Dec-2024 contract added £1.41 per tonne while same contract for EUAs moved in the opposing direction and fell by €0.57 per tonne.   

Oil Market

In crude oil markets front month Brent reached a fresh 8-week high yesterday, closing the day at $86.01 per barrel with a gain of 77 cents a barrel. The market was supported by expectations of increased fuel demand over the coming months as well as a decline in US stock inventories. Forecasts of a hot summer in the Northern Hemisphere coupled with the impending hurricane season also added to the upside. Further reports of Ukrainian attacks on Russian oil infrastructure have heightened tensions in the region which continues to provide a level of price risk as well. The market remains tentative ahead of the release of US consumer price data expected on Friday which could provide an indication as to whether or not we will see crude oil prices continue to climb.  

Markets this morning

After yesterday’s muted market, NBP futures have opened firmer this morning.  The front month last traded at 81.10p per therm which is down almost a penny from the morning high for the contract.  Contracts out to the winter are all showing gains of just over a penny while the longer curve has yet to get going.  Similarly, trading for the prompt has been sluggish while gas demand for the day is up to compensate for lower wind generation in the power stack although the gas system is long. The unplanned outages at Dvalin and Visund continue to hamper gas imports to the continent this morning while Hammerfest’s return has still to be confirmed. Brent is down 26 cents a barrel to last exchange at $85.75 a barrel.