Gains to natural gas prices across the channel supported NBP prompt and futures

Gas Market   European gas prices increased on Monday after an unplanned outage was called at the Dvalin field.  Planned Norwegian maintenance has curtailed gas flows to Europe and the UK this month and while Gassco expect the outage to be resolved on Tuesday natural gas prices in Germany and the Netherlands ticked up.  Prompt and near curve futures on the NBP were buoyed by the gains across the Channel and higher crude oil prices also added some support to futures yesterday.  The Spot for the NBP settled 2.00p per therm higher after the GB gas system ran short earlier in the session while the Day ahead product finished 1.55p higher.  October, the front month, added 2.11p day-on-day to close at 89.94p while the Winter-24 contract settled at 100.18p, 1.78p up.  

Power Market

  Forecasts for strong wind speeds pressured the power prompt yesterday while baseload futures were marked higher on increases recorded by their counterparts on the NBP curve. Wind generation could exceed 15.0GW on Tuesday and the prompt tanked with the Day ahead falling by over 50% to £35.51/MWh. On the curve, the front month added £1.55/MWh to close at £75.85/MWh while the Winter-24 contract settled at £88.13/MWh with a similar increase. Early gains to carbon EUAs were reversed in the afternoon session as selling activity picked up. The Spot settled flat at €69.60 per tonne while contract out to Dec-25 declined by an average of 20 cent per tonne.  UKAs held the early gains and settled £0.79 per tonne higher.    

Oil Market

Crude oil prices settled higher on Monday after production and drilling activity along the Gulf coast was halted in advance of a hurricane expected to make landfall later in the week. Tropical storm Francine is forecast to reach hurricane status on Tuesday as it traverses the Gulf of Mexico on route to hit Louisiana by Wednesday. The hurricane warnings lifted crude oil prices with Brent recording it’s first increase in seven days. The November contract added 78 cents a barrel to close at $71.84 a barrel. In Libya the disputes between government bodies continue to curtail oil production while the exports from the port of Es Sider were grounded after National Oil Corp declared a force majeure. Meanwhile Morgan Stanley have trimmed their forecast for Brent for Quarter 4 by $5 a barrel to $75 a barrel noting weak demand.  

Markets this morning

The rebound in oil prices has fizzled out as Brent is down over a dollar this morning with poor trade data from China countering the production disruption in the Gulf of Mexico due to the hurricane warnings. The November contract for Brent has yielded $1.01 to last trade at $70.83 a barrel.  Closer to home, NBP futures opened firmer with October peaking at 91.43p per therm but latest trades have seen all the mornings premium being reversed and near months have moved into negative territory with October last exchanging at 89.64p. High winds have curbed gas demand this morning and the GB gas system is forecast long.