The NBP gas market continued its sideways ebb and flow on Friday

01 July 2024

Gas Market 

Direction was mixed across the NBP prompt and curve on Friday, with small gains exhibited on the far curve, while Day ahead and near curve contracts showed some mild weakness. On it’s first day of trading as the front month contract August-24 closed the day at 81.35p per therm, a decrease of 1.01p day on day, while the Winter-24 increased by 0.21p to close out at 100.25p per therm. Fundamentally the market remained largely unchanged, with an increase in imports from Norway via the Vesterled pipeline that offset losses through Langeled. Wind generation levels were revised down, leading to an expected increase in gas demand over the weekend. However wind levels are expected to pick back up from this week to more than 20% above the seasonal average.  

Power Market 

GB Baseload curve products tracked the upward movement of the NBP curve market on Friday, although gains were on the modest side. A downward revision to solar power production levels to between 10-20% below seasonal normal levels provided some support to the prompt. The July-24 contract expired at £73.25/MWh, while winter-24 moved to £89.23/MWh, an increase of £0.67/MWh. Carbon markets continued to slide on Friday, with the bears fully in control throughout the morning session before a sharp rally in afternoon picked prices back up. While EUAs settled higher, UKAs prices maintained day on day losses with the Dec-24 UKA closing £0.25 lower to finish at £45.95 a tonne.  

Oil Market

 Crude oil prices eased somewhat on Friday, however the expiring Brent August contract edged up slightly day on day. The market remains optimistic about a possible US interest rate cut as early as September, something which could lead to a stimulus to economic growth and greater oil demand. However, while the US economy remains relatively strong, concerns have lingered around China’s economic growth projections and whether demand levels from the worlds second largest oil consumer will pick up in the latter half of the year. The August contract for Brent closed the day at $86.41 a barrel with day-on-day gain of just two cents a barrel while the September contract yielded 25 cents a barrel to settle at $85.00 a barrel.

Markets this morning

Near months for the NBP firmed this morning with the new front month peaking at 83.15p per therm early on but latest trades have seen some of the early premium unwind.  August last traded at 82.72p which is an increase of 1.37p over Friday’s close. Similar gains have been made by contracts out to the end of the year while the full Winter contract is 1.70p higher at 101.95p. On the prompt the Spot and Day ahead products are in decline despite a short gas system as demand steps up to almost 160mcm to counter for lower wind generation in the power stack. The new front month for Brent, September is 37 cents a barrel higher at $85.36 with supplies expected to tighten through the third quarter.