Gas Market
An escalation in the conflict in the Middle East coupled with supply niggles supported natural gas prices across Europe on Wednesday. Hezbollah missiles targeting Tel Aviv were intercepted yesterday while Israel continued airstrikes on Southern Lebanon appearing to make way for a ground offensive. On the supply side, the unplanned outages at Sleipner, Karsto and Asgard continued to curb Norwegian exports to Europe although these are expected to be resolved by the end of the week. NBP futures opened firmer on Wednesday and gains were extended as the day progressed with October settling with an increase of 5.08p per therm, at 90.24p. Quarter 4 and the Winter contract which are also due to expire this week, both recorded gains greater than 4.00p yesterday while on the prompt, the Day ahead product added 3.55p while the Spot was up 5.40p.
Power Market
The strong increases on the GB gas curve fed into baseload futures yesterday while forecasts for higher wind generation weighed on the prompt. Baseload futures at the front of the curve rose by an average of £3.50/MWh on Wednesday with October posting the greatest increase of £5.05/MWh to settle at £75.05/MWh. Carbon EUAs climbed on the back of the gains in gas and the Spot for EUA settled at €64.76 per tonne.
Forecasts for higher wind generation weighed on the Day ahead product yesterday which settled £13.63/MWh lower. Latest forecasts could see wind generation top 10.0GW on Thursday and climb higher on Friday.
Oil Market
Libya took the first step to resolve government disputes by appointing a central bank governor yesterday. The disputes have restricted the country’s output and exports for the last number of weeks and yesterday’s appointment could lead to a quick restoration of oil supplies. Analysts reviewing China’s latest stimulus plan released on Tuesday, have said stronger steps maybe required to reignite the world’s second largest oil consumer’s economy to achieve the target growth of 5.0% of GDP. Upward pressure from the increase in tensions in the Middle East and a large draw on U.S. crude oil reserves limited losses on the day as Brent shed $1.71 a barrel to close at $73.46 a barrel.
Markets this morning
The U.S., France and allies have called for a 21-day ceasefire at the Israel-Lebanon border this morning and gas prices have opened softer. The Lebanese prime minister is open to talks and believes a truce between Hezbollah and Israel is possible, however, Israel continued to bombard the south of Lebanon with airstrikes overnight. NBP futures have recouped some of the early losses and the front month, October, is 0.64p per therm lower at 89.60p while the Winter last traded at 95.60p, down 0.29p. Crude oil prices have continued to demonstrate weakness this morning with Brent last exchanging at $71.94 a barrel, down $1.52.
26 September 2024
