Gas Market
On Monday, the NBP curve enjoyed some modest respite from the recent geopolitically fueled price increases, with near months averaging a day-on-day loss of 1.47p per therm. The front month fell by 1.74p to end the session at 100.86p per therm, but remained 3.59% higher than a week ago. The escalation of unrest in the Middle East as well as Ukraine’s decision against extending its gas transit agreement with Russia after it expires at the end of this year are continuing to add a level of risk into the market and limiting potential losses. Having initially been supported by a short system, the Spot market ended the session flat day-on-day at 98.05p per therm. Further along the curve, Day ahead was supported by a forecasted drop in temperatures which is expected to increase heating demand levels. However, gains were hampered by forecasts of high wind generation levels for the rest of the week.
Power Market
Losses across the NBP curve were reflected in GB Baseload futures contracts on Monday. The November-24 contract fell by £1.00/MWh to close the session a £86.00/MWh, while Q1 25 ended the day at £89.75/MWh, a day-on-day loss of £0.30/MWh. Prompt contracts were supported by a downward revision to temperatures for the rest of the week and lower than expected wind levels. Subsequently the Day ahead contract gained £2.62/MWh to close at £89.12/MWh.
In what was one of the busiest trading days since early 2022, European carbon prices fell to six-month lows early on Monday before making a come-back later in the session. On the back of bullish news reports the Dec-24 EUA contract closed the session at €62.12, up 53 cents day-on-day.
Oil Market
Front month Brent closed at $80.93 a barrel on Monday, up $2.88 day-on-day and the first time since mid-August that the contract closed above the $80.00 a barrel mark. The contract has now increased by 12.76% week-on-week. Concerns are rife that Israel could yet respond to Iran’s previous missile barrage by taking aim at Tehran’s oil infrastructure. There is also growing unease around the potential for the conflict to escalate further and create extended disruptions to regional oil and gas supplies. Fundamentals otherwise remain weak, which suggests that should Israel decide against attacking Iranian oil infrastructure, then we should see the market track back down. WTI for November delivery ended the day at $77.14 a barrel, up $2.76 on the previous close.
Markets this morning
In a continuation of yesterday’s decline, NBP prompt and curve contracts are this morning trading in negative territory. November-24 is back below the 100p mark, having last gone through at 99.96p per therm. A well supplied system, currently operating 7.8mcm long, has encouraged the Within day contract to fall by 0.30p day-on-day. Increased imports via Norwegian pipelines are also adding to the system comfort. Day ahead is down by 0.25p per therm, having last gone through at 98.00p per therm. Front month Brent has also opened below it’s previous close, having last traded at $79.58 a barrel. Concerns over potential oil supply disruptions have stagnated as the market awaits an Israeli response to the Iranian missile barrage of last week.
08 October 2024
