Friday’s losses continued into Monday as NBP prompt and curve contracts were once again in decline.

09 July 2024

Gas Market

NBP contracts were once again in decline on Monday, continuing Friday’s downward trajectory. Day ahead shed 2.68p to finish at 75.51p per therm, the lowest close since May 20th, despite an unplanned outage at the Tolmount platform and higher demand for gas from the power generation sector. With supply appearing otherwise healthy, the GB system was coping well despite the higher demand levels, with the system operating in a long position throughout the day. Further out, after hitting an intraday high of 79.09p per therm in the morning session as Hurricane Beryl made landfall in Texas, the largest producer of gas and oil in the US, the front month contract went on to close over 4.00p lower as the storm passed through without any notable damage to infrastructure. With prices seemingly taking comfort in what’s likely to be limited to no supply disruptions as a result, August-24 settled at its lowest level since May 16th to close at 75.00p per therm.  

Power Market

GB Baseload curve products tracked movements observed on the NBP market on Monday, making gains in the morning session only to fall back in the afternoon. The front month shed over £2.00/MWh day on day to finish at £67.00/MWh, which is down almost 5% week on week. A 620MW nuclear facility is expected to reach full capacity from July 12th after an unplanned outage limited output, which also played into the weakness on the near curve. UK and EU carbon prices were both in decline on Monday. EUA losses were attributed to an aggressive sell-off from speculative traders, while UK Allowances plunged on post-election profit-taking and weakness in both NBP and GB Baseload markets. Dec-24 UKA fell by 3.5% to close at £43.80 a tonne.  

 Oil Market

Oil prices traded sideways on Monday with market fundamentals remaining largely unchanged over the weekend. Front month Brent edged lower as talks over a US ceasefire plan to end the war in Gaza, mediated by Qatar and Egypt, are currently underway, potentially paving the way for an easing of the geopolitical unrest that has plagued commodity markets over the past 9 months. The market remains tentative to how Hurricane Beryl is tracking in the Gulf of Mexico and how that may impact on supply disruptions in the region. Beryl made landfall in Texas on Monday, the largest producer of oil and natural gas in the US, with associated supply risk limiting further losses. Front month Brent settled at $85.75 a barrel, a loss of $0.79 day on day. Its West Texas Intermediate (WTI) counterpart also shed value to close at $82.33 a barrel, down $0.83 day on day.  

Markets this morning

GB gas demand levels are flat day on day, with temperatures in-line with seasonal normal levels and gas for power demand flat. Wind production levels are higher day on day, with wind speeds forecast to remain high until at least July 14th. The return of the Tolmount facility after a recent unplanned outage has helped to support UKCS output this morning, with the GB system operating in a long position once again as a result of healthy supply. Taking note of these bearish fundamentals, the Day ahead contract has this morning shed over 1.50p on yesterday’s close to last trade at 74.00p per therm. Weakness has also fed through to the near curve with the front month contract last trading at 74.07p, down almost a penny on Monday.