In a volatile day of trade activity on the NBP, curve prices initially moved higher before shedding value during the afternoon session

Gas Market

In yet another volatile trading session, NBP contracts initially moved higher on Monday, with the front month contract reaching an intra-day peak 104.77p per therm. However, as the market digested the news that gas flows into Europe have so far been uninterrupted by the continued fighting in the Kursk region of Russia at the Sudzha border, curve contracts began to shed value late in the afternoon session. After trading a range of 8.61p, September-24 settled at 96.73p per therm, a day on day loss of 1.92p. In contrast, the Spot and prompt market remained elevated throughout the day despite the GB gas system being comfortably supplied, while high wind speeds ensured that gas-for-power demand was muted. The Day ahead contract increased by 3.25p to finish at 85.05p per therm, while the Spot closed at 86.50p per therm, a gain of 4.00p day on day.  

Power Market

GB Baseload curve prices traded relatively flat day on day on Monday, with modest gains seen across most contracts. The NBP’s afternoon losses didn’t quite follow through to the power market, although the front-month contract did manage to shed £0.45/MWh to close at £81.25/MWh. Further out, Baseload for Winter-24 gained £0.40/MWh to settle at £94.50/MWh. Prompt contracts followed the upward momentum of the NBP Spot despite forecasts for both wind and solar production being above normal for the rest of the week. Volatility across gas and power markets fed into gains across both European and UK carbon markets. The EUA Spot closed at it’s highest level since June 3rd, finishing at €71.40 a tonne, up €2.33 a tonne day on day.  

Oil Market

Crude oil markets extended Friday’s gains on Monday despite OPEC announcing a cut to its forecast for global oil demand growth in 2024 owning to softer demand expectations for China. Support arrived in the form of better-than-expected U.S. jobs data last week which has eased fears that the U.S. is on the cusp of a recession. Ongoing geopolitical tensions between Israel and Iran, as well as Russia and Ukraine, continue to provide a level of price support as well. The U.S. Defense Secretary yesterday confirmed the dispatch of submarines to the Middle East region on news of a possible escalation of the conflict there, while an attack on one of Ukraine’s nuclear plants on Sunday also added to supply disruption fears. Front month Brent increased by $1.72 day on day to close at $81.38 a barrel, an increase of 7% week on week.    

Markets this morning

Monday afternoon’s downside has continued into this morning with NBP curve contracts so far trading below their previous close. September-24 last traded at 94.37p per therm, down 1.35p day on day. The prompt and Spot have also shed value, with the Within day contract so far trading at a 2.96p deficit to Monday’s close. Demand levels are higher day on day as lower winds speeds have increased gas-for-power demand, however the GB system is managing this with ease. Maintenance at two UKCS facilities ended yesterday, adding extra stability to pipeline supply sources. Front month Brent is trading marginally higher than it’s previous close, last observed at $81.93 a barrel.