Brent settled higher on Thursday, snapping a four-day losing streak

Gas Market

 NBP futures recovered some of Wednesday’s losses yesterday as the markets failed to venture far from the mornings opening gambits. Near curve contracts edged around a penny higher from the get-go but couldn’t muster much momentum during the session and the front month settled a penny higher at 98.60p per therm. The remaining winter months were less than a penny up at the close.  Prompt prices also ticked up marginally with support from the unplanned outage at Oseberg which curbed Norwegian exports by up to 27mcm.  Gassco, the Norwegian gas operator, hoped to have the issue repaired by Friday but the latest post on their website has the expected resolution date now moved to the weekend.  

Power Market

November moved £1.13/MWh higher on Thursday with support from the near curve on the NBP.  GB baseload contracts from next summer out showed weakness and were marked down after an uneventful day for the power market.  Carbon prices were directionless for much of the session and the Dec-25 EUA contract settled at €65.05 per tonne, posting a loss of just 8 cent per tonne.  Similarly, UKAs settled marginally lower with the Dec-25 contract closing at £40.70. Wind generation is to pick up from Friday and the baseload for the Day ahead eased by £2.32/MWh. While the National grid expect wind generation to top 9.0GW on Friday, wind speeds will increase over the weekend and for the week ahead.  

Oil Market 

Oil prices settled higher on Thursday with Brent boosted by another interest rate cut by the European Central Bank. Yesterday’s gains snapped a four-day losing streak for the global benchmark as the expected 0.25% rate cut was confirmed around lunchtime by the ECB. Lowering the cost of borrowing can increase consumer spending and therefore oil demand will rise. The U.S. Fed is expected to announce a second decrease to interest rates next month. Crude oil prices were also boosted by the latest inventory report from the world’s largest oil consumer. The Energy Information Administration showed U.S. crude oil reserves fell by 2.2m barrels last week, while gasoline and distillate stocks were also down.  Late in the session news of the death of the Hamas leader, Yahya Sinwar, limited gains and raised hopes of a ceasefire.  

Markets this morning

The death of the Hamas leader behind the October 7 attack last year has raised hopes that Israel will be more open to truce talks and reduce the risks of a greater war with Iran. Gas prices have eased this morning with November on the NBP curve reversing yesterday’s gain having last traded at 97.57p per therm. Most futures contracts that have traded are down by around a penny while the prompt screen is still to show a trade.  The GB gas system is forecast 11mcm short today and imports through Langeled are around 14mcm below capacity. In the crude oil markets, Brent is 22 cents higher at $74.67 a barrel but the global benchmark is still on to post its largest weekly drop since early September.