Gas Market
The return of Norwegian gas flows into the UK via the Langeled pipeline on Monday weighed on the NBP prompt. This boost in supply ensured the GB system ended the session long, with the Within day contract falling by 3.60p to close at 81.40p per therm. Meanwhile, Day ahead shed 4.20p per therm amid the healthy supply outlook as well as warmer temperatures and strong solar production forecasts for the rest of the week. Further out, the prompts’ downside fed into losses across the near months, with October-24 posting a 5.35% day-on-day decrease to end the session at 81.17p, its lowest close since July. Following the peak of Norwegian maintenance, British storage levels currently sit at 72% full, while across the EU storage levels have reached 93.40% fullness.
Power Market
Downside exhibited on the NBP curve played into losses across GB Baseload future contracts on Monday. The biggest losses were seen across near months, with October-24 shedding £4.22/MWh day-on-day to close at £68.88/MWh. Prompt contracts showed similar weakness with above average temperatures and strong solar production output playing into the losses there. The Day ahead contract posted a £4.55/MWh loss to close the session at £81.21/MWh.
EU carbon dropped to lows not seen since April 2024 on Monday as weakness from European gas and power markets seeped into prices. Spot EUA’s closed the session at €62.70 a tonne, down €1.71 on the previous close.
Oil Market
The ongoing impact of Hurricane Francine on oil output in the U.S. Gulf of Mexico drove crude oil prices north on Monday. More than 12% of crude oil production remained offline after the weekend resulting in the upside. Front month Brent increased by $1.14 day-on-day to close the session at $72.75 a barrel. Support was limited however by persistent Chinese demand concerns, although the market remains tentative to the potential outcome of the U.S. Federal Reserve’s interest rate decision which is expected on Wednesday. Generally, a lowering of interest rates boosts economic activity and lifts demand for oil, which could see crude markets experience somewhat of a resurgence. WTI for October-24 delivery closed at $70.09 a barrel, up $1.44 on its previous close.
Markets this morning
In response to Monday’s heavy losses, NBP curve products have ticked back up slightly this morning. October-24 last went through at 82.17p per therm, up a penny on yesterday’s close. Flows from Norway into the UK have ramped up further due to ongoing easing of maintenance levels, with the GB system currently oversupplied by 17mcm. Brent oil prices are relatively flat day-on-day as the market awaits the outcome of the U.S. Federal Reserve’s policy meeting taking place tomorrow which could result in a cut to interest rates. Front month Brent last traded at $72.68 a barrel, down a modest 7 cents on Monday’s close.
17 September 2024
