NBP contracts out to the Winter-2024 settled an average of 1.50p lower yesterday

Gas Market

Ample gas supplies and a ramp up at Freeport LNG in Texas after a lowering of nominations on Wednesday weighed on European gas prices on Thursday. The near curve for the NBP partially reversed the gains witnessed during Wednesday’s session as the front month fell by 1.62p per therm. Contracts out to the Winter-2024 settled an average of 1.50p lower while losses for futures past this were around a half a penny or less.  GB gas demand was still elevated due to low wind, but the system coped well and still had a modest surplus as trading wound down for the day.  Prompt prices reflected the system’s comfort as the Spot and Day ahead products dell by 2.05p and 1.73p respectively. The Day-ahead is averaging 74.83p for August so far which 7.22p below the average for July of 82.05p.

Power Market

Near curve baseload futures were pressured by the declines seen on the near NBP curve yesterday. The front month posted a fall of £1.30/MWh as the contract settled at £66.20/MWh.  As with the NBP curve, losses further along the curve were more modest and the Winter-2024 eased by £0.75/MWh.  On the prompt, below average wind speeds provided support while the unplanned partial outage on the interconnector to France continues. After Wednesday’s sharp gains, Carbon prices were mixed yesterday as EUAs gave up early gains to settle around 2.5% lower while UKAs edged just shy of 1.0% higher. The Spot for EUAs settled €2.01 lower at €65.71 per tonne. Contracts for Dec-24 and Dec-25 yielded €1.79 and €1.84 respectively.

Oil Market

A strong performance by the U.S. economy over the second quarter buoyed the crude oil markets yesterday but gains were tempered by worries of lower oil imports from China. The American economy grew faster than expected from April to June but at the same time inflation eased which should clear the way for interest rates to be reduced come September. A lowering of interest rates leaves borrowers more disposable income, which should increase demand.  Slower growth in China is evident in the drop in oil imports in the first half of the year. Oil imports fell by 11.0% in the period from January to June for the world’s second largest oil consuming nation. While recent efforts to reignite the economy have come up short, the government announced a surprise cut in interest rates yesterday to rekindle growth.  

Markets this morning

The gas markets have ticked higher in early trading this morning but latest trades for the front month are down from the morning high of 76.63p.  August last exchanged at 76.11p which is 1.92p above last night’s close.  The Winter-2024 is 1.71p up at 96.00p while future contracts past this have yet to trade. The prompt is still dormant but based on the bid and ask prices the Day ahead will open higher.  The GB gas system is in balance at 183mcm this morning but an outage at Visund and an extension of planned works at Karsto until next Wednesday has raised concerns. Brent is down 23 cents a barrel this morning and is on track to post a third week of declines.