Near NBP months averaged gains of 1.88p yesterday

Gas Market

 NBP futures switched direction on Thursday with near contracts reversing most of Wednesday’s losses as LNG tankers queued in the Freeport channel.  Yesterday’s Nominations for Freeport LNG in Texas were around a third of normal capacity indicating one of the liquefaction trains was in operation although no cargoes have been loaded yet.  The Freeport plant is responsible for around 20% of U.S. gas exports and U.S. gas prices had fallen earlier in the week on concerns of a supply glut when reports of the outage at Freeport emerged. However, the front month for the Henry-Hub gained 4.4% or 0.70p per therm yesterday.  Freeport have still to indicate when full production will be restored at the plant.  The August contract for the NBP settled 2.27p per therm higher to close at 76.04p while Winter-2024 settled at 95.60p, up 1.44p.

Power Market

Baseload futures reacted to the rise on the NBP curve yesterday while carbon was mixed. The August contract posted the largest gain of the day moving £1.50/MWh higher to close at £66.75/MWh.  Further along the power curve, gains were more modest, and the Winter-2024 contract settled at £84.20/MWh having added £0.70/MWh day-on-day. Wind speeds are forecast a little lower for Friday but solar will pick up the slack and baseload for the Day ahead eased on the day. The Spot for carbon EUAs settled below the €65.00 per tonne mark for the first time since the end of April and could go lower as the market demonstrated weakness yesterday by not tracking gas prices higher.  UKAs, however, did firm on the day but gains were less than 1.0%.

Oil Market

After rebounding off a one-month low on Wednesday, crude oil prices struggled to find direction yesterday as Brent settled 3 cents a barrel up while West Texas Intermediate fell by 3 cents a barrel.  The latest economic data from the U.S. has raised hopes for the first cut in interest rates from the Federal Reserve in September but also pointed to a slowing of demand. The numbers of Americans registering for unemployment benefit increased last week while growth in retail sales is down. It was the last day of China’s plenum yesterday; a strategy meeting held every five years or so to devise long term economic and social plans. While government officials have pledged to reform the economy to achieve this year’s target of 5.0% growth, no details were released and the crude oil markets were left flat.  

Markets this morning

NBP futures have softened this morning, and the front month has retraced most of yesterday’s gain. August last traded at 74.69p per therm which is 1.35p down on last night’s close. Further out, the Winter is 0.90p lower at 94.70p. Prompt prices are flat despite the GB gas system showing an early surplus while gas demand for today is pitched around 10mcm below yesterday’s level. Carbon EUAs have continued to ease this morning with Dec-24 and Dec-25 contracts down by an average of 48 cent per tonne.  Crude oil prices have continued to move sideways with Brent close to last night’s settlement at $85.10 a barrel.