Gas Market
The commencement of LNG cargo loadings at the Freeport facility helped to ease recent supply fears surrounding U.S. LNG exports, with most NBP curve contracts shedding value on Monday as a result of the news. However, with persistent high temperatures in Asia, as well as uncertainty around the full restart at Freeport, the global LNG market remains tense. There are currently no LNG cargoes scheduled to arrive into the UK between now and the end of the month. Comfortable stock levels also fed into the weakness, with European storage levels currently sitting above 80% fullness. If European shippers were to continue to inject at recent rates it would ensure stocks are full by August 18th, nearly two-and-a-half months ahead of schedule. Front month NBP shed 0.77p day on day to settle at 73.96p per therm. Prompt fundamentals remained largely unchanged day on day, with the Day ahead contract closing flat against Friday’s close of 73.40p per therm.
Power Market
Losses across gas and carbon markets on Monday helped to drive the GB Baseload curve down. Declines across prompt contracts were more limited with upside coming from low wind level forecasts of between 10-20% below normal for the rest of the week mitigated by above average temperatures. Day ahead shed £0.48/MWh day on day to close at £73.02/MWh, while further out Winter-24 fell by £0.75/MWh to settle at $82.85/MWh. The biggest day on day loss was observed on the Q1-25 contract which shed £1.28/MWh to close at £85.60/MWh.
European carbon markets declined on Monday driven by selling pressure and weakness across the wider energy complex. The Spot EUA closed at €63.80 a tonne, the lowest since April 11th. UK carbon prices followed suit, with Dec-24 finishing down by £0.55 to close at £40.06 a tonne
Oil Market
Joe Biden’s announcement to not seek a second term as the U.S. President did little to drive direction across oil markets on Monday, with traders instead opting to focus on a weak technical outlook, ample inventories and soft demand. Energy policy will almost certainly be a core debating topic between Kamala Harris and Trump, however it is expected that neither will promote policies that have an extreme impact on oil and gas markets. Oil markets also appeared to shrug off ongoing tensions in the Middle East after Yemen’s Houthis told media on Sunday that they will continue to attack Israel and not abide by any rules of engagement, a statement which appeared to dampen the recently renewed hopes of a ceasefire in Gaza. Front month Brent closed the day down by just 23 cents, still enough to reach a 6-week low of $82.40 a barrel.
Markets this morning
The downward trend continues on the NBP curve this morning with front month NBP last trading at 73p per therm, down just under a penny on Monday’s close. Trading across the prompt market has yet to get going. The GB system is this morning operating in a short position despite flows from Norway being nominated up by 4 mcm per day and demand levels remaining flat. Maintenance at various Norwegian facilities is ongoing however no changes to the maintenance schedule have been reported. Crude oil movements are stable this morning with fundamentals remaining largely unchanged day on day. Front month Brent has so far shed just 9 cents on the previous close.
23 July 2024
