Volatility ensued across the NBP on Monday with notable gains exhibited on the prompt and near curve.

Gas Market

Volatility ensued on the NBP prompt and near curve on Monday, with the front month contract trading a range of 6.03p per therm. More than 16.0% of natural gas output along the U.S. Gulf coast remained offline over the weekend in the aftermath of Hurricane Rafael, which may impact U.S. LNG exports into Europe at a time when demand for gas is gaining ground due to lowering temperatures. The December-24 contract increased by 3.15p day-on-day to settle at 110.56p per therm. The ongoing low presence of renewables in the power stack alongside cooler temperatures fed into gains on the prompt, with Day ahead increasing by 4.15p to end the day at 111.05p per therm, its highest close since the end of November 2023. At that time Day ahead traded a high of 120.12p per therm, before falling back to 104.80p on the last day of the month and falling a further 26.5% by the end of December 2023.    

Power Market

Volatility on the NBP near curve was mirrored in GB Baseload contracts on Monday, with the Q1 25 product increasing by £2.50/MWh day-on-day to end the session at £95.30/MWh. The front month also exhibited upside, gaining £1.05/MWh on the previous close to settle at £91.05/MWh. A downward revision to wind output levels for the rest of the week lifted the Day ahead contract, which rose by £15.24/MWh, or 16.1%, to close at £109.99/MWh. Although European carbon prices initially followed the upside on the NBP and TTF gas markets, contracts started to move back down later in the day to end the session just above their previous close in what was a volatile day of trade. The Dec-24 EUA contract gained just 15 cents to close at €67.82 a tonne.  

Oil Market

Crude oil markets edged further south on Monday in a continuation of Fridays losses. Downside was driven after China’s latest economic stimulus plan disappointed investors seeking fuel demand growth and as the U.S. dollar edged higher. The U.S dollar climbed to its highest level since July during yesterday’s session, building on gains seen after the election of Donald Trump. A stronger dollar makes greenback-denominated commodities, such as oil, more expensive for holders of other currencies and tends to weigh on prices. Front month Brent closed the session at $71.83 a barrel, down 2.8% day-on-day and 4.3% down week-on-week. The WTI contract for December delivery ended the day at $68.04 a barrel, a loss of $2.34 on its previous close.  

Markets this morning

Movement is mixed this morning across the NBP curve. Near curve contracts have opened slightly up on yesterday’s close, with the front month contract last trading at a 0.64p premium to Monday. Slightly further out, the Summer 25 contract last went through at 102.02p per therm, down 0.55p day-on-day so far. Although the prompt is yet to get going, fundamentals suggest prices could be supported by a short system and higher day-on-day gas for power demand levels. Crude oil prices are trading sideways this morning as fundamentals remain largely unchanged and the market awaits price direction from OPEC’s monthly report. Front month Brent last went through at $72.29 a barrel, up 46 cents day-on-day.