Gas Market
Losses across the NBP prompt and curve were consistent on Monday with weak fundamentals overpowering some minor bullish indicators. Healthy storage levels are playing into the downside on the near curve with European storage levels now higher than this time last year at 77.0% full and British LNG storage facilities currently sitting at 81.9% full. Stable Norwegian pipeline supplies have also suppressed any excessive need for spot LNG buying, with the market shrugging off the current lack of cargoes on the UK schedule. After opening firm against Friday’s close, the front month NBP contract went on to fall to an intra-day low of 71.94p per therm in the morning session. Losses were partially retraced later in the day with August-24 eventually settling at 72.24p per therm. Numerous planned outages at facilities in the North Sea scheduled for the coming days did little to damper the bears influence on the prompt, with the Day ahead contract shedding 1.20p to finish at 72.30p per therm.
Power Market
An upward revision to wind output from next week helped to ease GB Baseload prompt prices on Monday, while contracts further out tracked losses exhibited on the NBP curve. Near months fell by an average of £0.78/MWh day on day, with the biggest loss observed on the Summer-25 contract which fell by £1.30/MWh to settle at £71.95/MWh, its lowest close since May 1st.
Further softening across European gas markets fed into the downside seen on EUAs on Monday. Higher wind output and moderate cooling demand arcoss central Europe also helped to push prices down with Dec-24 EUA settling at €67.53 a tonne, a loss of almost €2.00 day on day. Slightly more modest losses were seen in the UK carbon market with the Dec-24 UKA falling by £0.70 to finish at £40.40 a tonne.
Oil Market
Brent crude oscillated around the $85.00 a barrel level on Monday, with weak and strong fundamentals acting against one another to result in sideways trading. In China, oil refinery output fell by 3.7% year on year in June, down about a third month on month, amid planned maintenance, lower processing margins and lackluster demand. Chinese data released yesterday added to the economic concerns as it was reported that the world’s second largest economy grew by 4.7% in the April to June quarter, the slowest growth since the first quarter of 2023. These weak demand indicators were at odds with strong demand elsewhere, OPEC+ supply restraint and heightened geopolitical tensions in the Middle East and the U.S. over the weekend. Front month Brent finished the day up by just 18 cents at $84.85 a barrel.
Markets this morning
Contracts across the NBP prompt and curve have opened strong this morning with prices already retracing the previous day’s losses. August-24 was last observed at 74.43p per therm, an increase of 2.19p day on day. The GB system is currently operating slightly long despite a drop in Norwegian flows due to ongoing maintenance at the Visund platform and higher demand from the power generation sector. Upside is similarly strong on the prompt with the Day ahead contract last trading at 73.75p per therm, up just over 2p on Monday’s close. Crude oil markets continue to edge down this morning on worries surrounding a slowing Chinese economy. Front month Brent is currently trading around $84.15 a barrel, down $0.70 day on day.
16 July 2024
