Concerns over the Norwegian outage schedule for August as well as bullishness across the wider energy complex lifted NBP prices on Wednesday

Gas Market

Wednesday’s gains across the NBP seemingly took the market by surprise, considering the recent resumption of production at Freeport and otherwise stable fundamentals. Strength across the wider energy complex as well as a lingering level of supply risk were the only bullish factors on the day providing support to longer-dated contracts. There are currently no LNG vessels scheduled to arrive into the UK for the remainder of the month. With just one cargo having arrived during the month of July, this is significantly lower than the two-year average of six. August-24 posted the biggest gain across the curve, increasing by 2.60p to close at 75.81p per therm, with concerns over the Norwegian maintenance schedule for August pulling up the front month and prompt. Day ahead posted a 2.35p gain to close at 74.70p per therm.  

Power Market

Increases across the NBP prompt lifted short-term GB Baseload contracts on Wednesday despite upward revisions to wind and solar production levels for the next two weeks. Day ahead was the only contract across the market to close the day lower, finishing at £71.00/MWh, a loss of £1.94/ MWh day on day. Further out, near and far curve products chased the NBP market up, with August-24 posting a gain of £1.65/MWh to close at £67.50/MWh, while Winter-24 closed at £84.15/MWh, an increase of £1.35/MWh day on day. The Spot EUA contract settled at its highest level in 2 weeks at €67.72 a tonne, driven up by a sizeable increase in speculative short positions. In contrast, UK Allowances traded in negative territory, with Dec-24 falling by £0.60 to settle at £39.55 a tonne.  

Oil Market

Oil prices edged up on Wednesday, ending a three-day run of losses, but remained just above the recent six-week low price level. Demand forecasts showing few signs of the fuel consumption surge usually seen at this stage of the northern hemisphere summer ensured upside from growing supply risk from Canadian wildfires as well as declining U.S. crude and fuel inventories was muted. Ongoing ceasefire talks between Israel and Hamas, as well as concerns over the economic slowdown in China are also playing into the weakness in the market. Front month Brent finished the day at $81.71 a barrel, an increase of 70 cents day on day. The WTI September contract made a similar gain of 63 cents to close at $77.59, maintaining a sub-$80.00 a barrel level for the fourth day in a row.  

Markets this morning

NBP prices have retraced some of yesterday’s gains so far this morning, with August-24 last trading at 74.63p per therm, down over a penny day on day. On the prompt, Day ahead is also in decline, shedding 0.70p so far on yesterday’s close. Stable fundamentals appear to be the market focus, with the GB system operating in a long position and Norwegian pipeline supplies stable despite an ongoing outage at Karsto. The crude oil market is also in decline this morning, with ongoing concerns surrounding weak demand in China and expectations of a nearing ceasefire in the Middle East helping to erase yesterday’s gains. Front month Brent is down 67 cents, last trading at $81.04 a barrel.