Gas Market
Contracts across the NBP posted further gains on Monday, with near months increasing by an average of 3.46p per therm on Friday’s close. Supply risk associated with the heightened tensions in the Middle East over the weekend were cited as the main driver, while increased cyclone risk in the Gulf of Mexico which could hamper U.S. LNG exports also added to the upward pressure. There is currently one LNG cargo scheduled to arrive into the UK this week. August-24 closed at its highest level since becoming the front month, closing at 79.70p per therm, a gain of 3.59p day on day. The Spot and prompt market were supported by low wind generation levels, a short GB system throughout a portion of the day and the continuation of an unplanned outage on Norway’s Visund platform. NBP Day ahead closed at 78.25p per therm, a day on day increase of just over 3.00p, while Within day settled at 78.50p per therm, a 3.10p premium to Friday’s close.
Power Market
The continuation of the NBP’s upward trajectory from Friday into Monday fed into gains exhibited across GB Baseload prices. Particularly bullish NBP near months caused Baseload for August-24 to increase by £1.60/MWh day on day, settling at £69.70/MWh. Further out on the curve the gains continued despite losses on the UK carbon market. The Winter-24 contract finished at £86.25/MWh, a £1.75/MWh premium to Friday’s close.
European carbon prices chased the NBP up on Monday, with the Spot EUA contract finishing close to last week’s peak of €67.72 a tonne to settle at €67.69 a tonne. In contrast, UK Allowances were once again in decline, with Dec-24 closing down by £0.20 to finish at £39.42 a tonne.
Oil Market
Crude oil prices edged down on Monday, appearing to shrug off the potential supply risk driven by the escalation of geopolitical unrest in the Middle East over the weekend due to a lack of any material supply disruption. Front month Brent closed below the $80.00 a barrel mark for the first time since June 7th, finishing at $79.78 a barrel, a decline of $1.35 day on day. Lackluster demand signals from China as well as potential output restoration by some OPEC+ members during the final quarter of the year weighed on crude markets. Oil inventories in the U.S. remain higher than expected for this point in the year, which only added to yesterday’s downside. The WTI contact for September also shed $1.35 day on day, settling at $75.81 a barrel.
Markets this morning
After two straight days of gains, NBP prices have opened in negative territory this morning as the risk of a wider spread to conflict in the Middle East appears to have eased. On its final day prior to expiry, August-24 last traded at 78.99p per therm, a decline of 0.71p on yesterday’s close. Activity on the prompt has been limited so far, although short-term fundamentals remain stable. Gas-for-power demand is elevated today due to lower wind speeds, however stable pipeline flows from Norway are ensuring the GB systems remains well balanced. Crude oil prices are up slightly on yesterday’s close yet remain below the $80.00 barrel level. Front month Brent last traded at $79.96 a barrel, an increase of 18 cents day on day.
30 July 2024
