Energy prices continued to shed value on Wednesday as reduced geopolitical risks weighed on markets

Gas Market

Tuesday’s downside continued into Wednesday, with most NBP near and far curve contracts shedding value on reduced geopolitical risk. The November-24 contract posted a loss of 1.20p to end the session at 97.60p per therm, having traded as high as 100.80p per therm earlier in the day. Prompt activity was more mixed however. Although the Spot market fell by 0.75p day-on-day to settle at 95.50p per therm, Day ahead gained value on increased gas-for-power demand as well as some ongoing Norwegian supply niggles. An unplanned outage at the Oseberg facility was extended until Thursday, while a further unplanned maintenance issue at the Gullfaks production facility will reduce output until at least October 21st. Day ahead ended the session at 95.30p per therm, up 0.30p on the previous close.  

Power Market

  An upward revision to wind power production levels weighed on the prompt market on Wednesday, with the GB Baseload contract for delivery next weekd shedding £4.72/MWh day-on-day. Further out, near and far curve products were driven down by weakness on the NBP gas market. The front month contract fell by 31.55/MWh to close at £84.90/Mwh, while Q2 25 shed £1.90/MWh to end the day at £73.75/MWh. European carbon markets tracked the downside exhibited on the TTF gas market on Wednesday, while UK Allowances also tracked down. The Dec-24 EUA contract fell €1.92 to close the day at €63.11 a tonne, while its UKA counterpart shed £0.25 to close at £38.70 a tonne.      

Oil Market

Oil prices steadied on Wednesday after shedding over 8.0% in less than two weeks. In what was a flat day for trade, Brent for December delivery fell by just 3 cents day-on-day to close at $74.22 a barrel. An outlook for ample supply next year outweighed the ongoing uncertainty over what may happen next in the Middle East conflict despite recent indications that Israel will not attack Iranian energy infrastructure. Supply curbs by OPEC+ will remain in place until December when some members are scheduled to start unwinding one layer of cuts. Positive economic news from the U.S. and Europe helped to limit the downside on the day. The November WTI contract posted a loss of just 19 cents to close the session at $70.39 a barrel.    

Markets this morning

NBP gas prices have firmed slightly this morning, with the front month contract last trading just under a penny above its previous close. No activity has been observed as yet on the prompt market. Although wind speeds are lower today, wind power production is expected to increase considerably over the weekend and into next week. The GB system is currently operating in a long position, despite flows into the UK via Norway being down slightly day-on-day. Crude oil prices continue to trade sideways as the market awaits news on developments in the Middle East, the release of official U.S. oil inventory data and details on China’s stimulus plans. Front month Brent last went through at $74.39 a barrel, up 17 cents on yesterday’s close.