Near months of the NBP averaged gains of 1.50p yesterday

05 July 2024

Gas Market 

 An unplanned outage at Norway’s Oseberg field flipped gas prices on Thursday as Wednesday’s losses were partially eroded. Gassco, the Norwegian gas operator is uncertain as to the duration of the outage for now and the impact is up to 7.5mcm of capacity.  The market reacted to the news with both the prompt and near curve rebounding.  By the close of play the Spot had added 2.20p per therm while the Day ahead product was 1.85p higher, closing at 77.70p.  NBP futures posted more modest gains save for the front month which rose by over 2.00p to settle at 77.98p. Market fundamentals remain bearish apart from the outage at Oseberg and despite yesterday’s gains the front month is still 4.38p lower over the last five days.

Power Market 

GB Baseload futures settled higher on Thursday with increases in gas prices being the main driver. The front month for the baseload curve settled £1.75/MWh up at £70.25/MWh while further the Winter-2024 contract closed at £89.18/MWh, up £0.83/MWh. Carbon prices were mixed yesterday with EUAs in decline while the UKAs firmed over the day ahead of the results of the UK election. A strong renewable performance is expected to continue into the weekend and the Day ahead settled at £59.63/MWh. Wind generation averaged over 16.0GW yesterday which was almost 60.0% of demand while solar made up 11.3% or 3.2GW of demand. 

Oil Market

After Wednesday’s gains the crude oil markets were more subdued yesterday as the Independence Day holiday limited trading through the afternoon.  Early trading saw the global benchmark dip to $86.51 a barrel with poor results from Europe weighing. May’s industrial orders for Germany were down 1.6% on the previous month allowing for seasonality while the three months to May were down 6.2% on the previous three month. In the U.S., increased applications for unemployment benefits also raised demand concerns, however, dollar weakness provided the support through the afternoon which left Brent slightly higher at the close. The September contract settled 9 cents higher at $87.43 a barrel.  

Markets this morning

There’s a compressor failure causing the outage at the Oseberg field and Gassco are unsure of the expected resolution date according to the latest post on their website. NBP futures opened firmer this morning with August rising to 79.60p per therm but latest trades have seen the contract slip below last night’s close at 77.85p. Further out, the Winter-2024 contract is 0.28p lower at 98.55p while the longer curve is still flat.  Prompt prices are also slow to get off the mark this morning, but the GB gas system is forecast 7mcm long against today’s demand of 148mcm. In the crude oil markets, Brent for September delivery is 5 cents down at $87.38 a barrel.