Gas Market
Despite the ongoing conflict in the vicinity of the cross-border interconnector at Sudzha gas flows have remained constant from Russia into Europe. As a result, the weakening in gas prices witnessed on Monday afternoon continued into Tuesday’s session. Near-curve contracts were impacted the most as the September contract shed 0.79p/th to settle at 95.94p, having traded almost a penny lower. On the far curve prices were relatively flat, as the front season fell by a mere 0.21p/th, and Summer-25 increased by 0.20p/th. Prices on the prompt also fell but losses there were capped by actual wind generation outturning lower than forecasts. The lower wind generation increased gas for power demand which capped the losses at 1.75p/th for the Day ahead contract as it settled at 83.30p/th.
Power Market
GB Baseload power futures tracked losses on the NBP to move marginally lower day on day. Following Monday’s mixed session, the power market declined on Tuesday fully assimilating Monday’s and Tuesday’s gas market decline. Also weighing on the power market was a decline of 1.6% on the UKA Dec-24 carbon allowances contract. On the prompt the lower-than-expected wind generation supported prices. Baseload day ahead contract increased in value, bucking the losses on the gas market, as it increased by almost 10% to £81.35/MWh.
European carbon allowances also tracked gas prices lower with the Dec-24 contract shedding 2.02% falling to €71.38/tonne.
Oil Market
As days pass without retaliation from Iran for the assassination of a Hamas official the perceived risk for the conflict in the Middle East to widen lessens. Oil had increased to $82.30/bbl on Monday, an increase of $6.00/bbl from the seven-month low of the previous week as the market weighed up the risk to supply should the war widen in the Middle East. As the risk for escalation diminishes, the premium in oil contracts has slowly begun to unwind from crude prices. The Brent front month contract for delivery in October shed 2.0% in trading on Tuesday, bucking a five-day trend of steady increases. Also weighing on prices was OPEC+’s reassessment of global demand growth to levels marginally lower than previous expectations. As a result, the October Brent contract fall to $80.69/bbl, while the WTI equivalent fell to $78.35/bbl.
Markets this morning
Near curve contracts, having opened strongly, have receded and are flat to Tuesday’s close. The Sep-24 contract last traded at 95.75p/th, a marginal decline of 0.19p, while contracts from Nov-24 onwards are marginally higher. The front season last traded at 111.55p/th, however current bid and offers indicate a price more closely aligned to Tuesday’s close of 110.11p/th. Following yesterday’s sharp drop on Brent crude oil markets, the front month is trading stronger this morning, and last traded at a premium of $0.53/bbl to Tuesday’s closing assessment.
