Gas Market
NBP near curve gas contracts extended Monday’s gains increasing in value across the session. The front month, Jul-24 was assessed at 81.59p/th at market settlement on Tuesday, a day-on-day gain of 1.90p/th. Similarly, the Q3-24 contract as it approaches expiry on Thursday, posted a gain of 1.89p/th settling at 83.92p/th. The gains came amid several bullish reports, although the impact on market fundamentals is far from clear. Finland’s state owned Gasum has confirmed it will cease importing Russian LNG due to berth at the Inkoo terminal from the end of July following the EU’s ban last week. However, LNG will still be imported at two other terminals. Russian LNG accounted for only 7% of Finnish LNG imports in Q4-23. Also contributing to the bullish sentiment was reports that some nuclear plants in France had been shut down increasing gas demand for power generation across the continent.
Power Market
The GB baseload power futures traded higher on Tuesday tracking gains on the NBP curve. With Jul-24 approaching expiry this Friday the baseload contract made the largest gain of the session, increasing by £2.00/MWh, likely supported not only by the increasing gas, but also the impact of French nuclear shut down on British imports. UKA carbon prices also provided further support to far curve contracts, as the winter-24 contract moved to £89.68/MWh, a gain of £1.70.
The EUA carbon allowance market rebounded from 7-week lows on Monday, increasing to €66.55 a tonne on Tuesday. The influence of gas on the carbon market had weakened somewhat in recent weeks, but its influence was restored as carbon tracked the TTF market higher yesterday.
Oil Market
Crude oil prices retreated off Monday’s eight-week high with concerns over U.S. demand increasing while consumer confidence was dented with the latest economic data. While the U.S. labour market remains resilient consumer confidence fell in June with households holding back on spending due to inflation and not expected to splurge during the summer months while interest rates remain unchanged. The American Petroleum Institute reported a slow start to the summer driving season and released industry figures late in the session which recorded a build in U.S. crude oil and gasoline stocks but as we’ve seen in the past the official data can be at odds with the industry group. The Energy Information Administration is due to publish official figures late on Wednesday. The August contract for Brent settled down a dollar at $85.01 a barrel.
Markets this morning
NBP futures have opened firmer this morning, continuing Tuesday’s modest upward trend. The front month contract last traded at 83.03p per therm, the highest trade of the morning so far and a day on day increase of 1.8%. Prompt trading is quiet this morning although direction will likely be provided by reduced Norwegian imports due to limited capacity availability on the Langeled pipeline as well as an extended maintenance outage at the Barrow North facility. However, lower gas-for-power demand coupled with a balanced GB system could mitigate the upside. Front month Brent is back in positive territory this morning, up 29 cents to last exchange at $85.30 a barrel.
26 June 2024
