News that Russian gas deliveries into Austria under a contract with OMV would halt from 16 November led to upside on the NBP near curve on Friday

Gas Market

A relatively calm morning on the NBP on Friday turned into a volatile afternoon session after news reached the market that Russian gas deliveries into Austria under a contract with OMV would halt from Saturday, 16 November. The cessation of this contract will remove approximately 16mcm per day of gas supply into Austria. The news created upside on the near curve, with the front month contract increasing by 0.78p to end the day at 117.47p per therm, the highest the contract has closed since December 2023. Summer 25 exhibited the largest day-on-day gains, having increased by 1.59p to end the week at 109.01p per therm. Cooler temperatures fed into gains on the prompt market, while an upward revision to wind generation levels mitigated upside. The Day ahead contract increased by 0.30p to settle at 117.05p per therm.

Power Market

Movement was mixed across the GB Baseload curve on Friday. A slight uptick on the front month in the morning turned into more pronounced gains before the close. European gas prices displayed considerable volatility late in the session following an announcement that Russian gas deliveries to Austria’s OMV would cease from Saturday. The December contract closed the session at £95.75/MWh, up £1.50/MWh day-on-day. Despite the upside on European gas markets in the afternoon, European carbon prices ended the session down day-on-day. The Dec-24 EUA contract ended the session at €67.33 a tonne, down €1.06 day-on-day. In contrast, UKA’s for December traded sideways, ending the day up just £0.10 a tonne.

Oil Market

Crude oil markets moved down on Friday as worries about waning Chinese demand and expectations of fewer U.S. Federal Reserve interest rate cuts weighed on prices. China’s oil refiners in October processed 4.6% less crude oil than a year earlier, while China’s factory output growth slowed last month and demand woes in its property sector showed few signs of abating. In the U.S., Federal Reserve Chair Jerome Powel said on Thursday that the U.S central bank did not need to rush to lower interest rates. A slow down in expected rate cuts could curtail economic growth which would limit fuel demand. Front month Brent fell by $1.52 to finish the week at $71.04 a barrel. WTI for December delivery settled at $67.02 a barrel, a loss of $1.68 day-on-day.  

Markets this morning

After Friday afternoon’s upward moves, near curve contracts at the NBP have opened lower. The December-24 contract last went through at 115.86p per therm, down 1.61p day-on-day. The GB system is this morning oversupplied, with an increase in LNG sendout helping to cope with increased demand levels due to colder temperatures. Trade activity on the prompt is yet to get going. Crude oil markets have edged up marginally on heightened geopolitical concerns after fighting between Russia and Ukraine intensified over the weekend. Front month Brent last went through at $71.43 a barrel, up 0.39 cents day-on-day.