Gas Market
Prompt prices were largely unmoved in trading Tuesday as the spot market settled flat to Monday’s close, while Day ahead increased by a mere 0.75 pence per therm. On the near curve the December contract settled at 112.87p/th, a premium of 1.87p/th to the previous close but 18% lower than year ago prices. However, in trading post settlement the contract declined, and last traded at 110.87p/th and an increase of only 0.3p/th session on session. Prices have been supported in recent days by the return of temperatures to seasonal norm levels following a mild start to November. Also supporting prices has been the lack of renewable power on not just the UK system but across the continent. Wind speeds have remained persistently low while cloud cover has restricted solar generation culminating in high gas for power demand at a time when gas for heating has increased.
Power Market
The price increases on the NBP gas market were reflected in price movements on the GB baseload futures market. Pries increased across the majority of the curve contracts, although the movement was limited, likely impacted by the post settlement decline on the NBP. Also capping the gains was a drop in carbon UKA prices on Tuesday. Day ahead baseload prices remain elevated due to the lack of renewables on the system while the statutory outage on the EDF’s nuclear
reactors was also likely adding support to the prompt contract.
European Carbon prices declined marginally on Tuesday. The Dec-24 contract opened in negative territory, trading as lows as €65.76/tonne before recovering to settle at €67.14/tonne.
Oil Market
OPEC has, for the fourth consecutive month, cuts its global oil demand forecast for both 2024 and 2025. The group of oil producing nations issued its latest monthly report on Tuesday that revised 2024 global oil demand lower from 1.93million barrels per day to 1.82 million bpd, a figure that is still over double the projected growth being forecast by the International Energy Association. OPEC’s forecast for 2025 has been revised lower to 1.54 million bpd from 1.64 million in October. Despite the reduction in demand projections oil held firm on Tuesday following two days of losses that saw the Brent contract for delivery in January shed 5.0%. Settling at $71.89/bbl the contract gained a mere 6 cents from Monday’s settlement.
Markets this morning
NBP gas contracts are trading at a discount to Tuesday’s settlement. The December contract traded as low as 108.00p/th in early trading and is currently exchanging hands at 111.15p/th, 1.28p/th lower than the previous close. The losses are not restricted to the near curve, with Summer-25 also trading lower this morning. Carbon prices are releasing some of the premium that has fed into prices in recent sessions, as the Dec-24 has shed almost a euro per tonne in early trading, tracking losses on European gas markets. Oil is trading higher due to increased trading activity for near term contracts and cargos. The level of activity could point to possible supply tightness despite the revision downwards of global demand growth projections.
13 November 2024
