NBP near curve contracts retraced most of Tuesdays’ losses on Wednesday as ongoing geopolitical tensions fed risk premium into prices.

 Gas Market

After initially opening the morning session below its previous close, the NBP front month contract went on to trade at a high of 118.18p per therm, before closing down a touch at 117.15p per therm. The ongoing sense of unease surrounding the war in Ukraine and whether or not unfolding events will disrupt gas supplies coming into Europe is ensuring the NBP maintains its price sensitivity to even potential supply threats. With today representing what is forecast to be the coldest day of the current cold spell, the Day ahead contract yesterday increased by 2.40p to close at 117.15p per therm. An increase in gas for power demand due to fluctuating wind speeds held up the Spot, with Within day posting a gain of 1.20p per therm. Lower day-on-day Norwegian flows into the U.K. also provided some short-term support, although LNG send-out remained high, helping to keep the system well supplied throughout the day.  

Power Market

Although the front month GB Baseload contract traded flat day-on-day, the rest of the near curve followed the upward traction on the NBP gas market on Wednesday. The January 2025 contract edged up by £0.95/MWh to end the session at £102.05/MWh while February 2025 rose by £1.20/MWh to close at £101.80/MWh. Further out, trade was more flat, with Winter 2025 ending the session down by just £0.05/MWh day-on-day. Movement was mixed across European carbon markets on Wednesday with the Spot EUA following the upward path of European gas markets, while the Dec-24 contract closed a touch below it’s previous close to end the session at €68.40 a tonne.  

Oil Market

In what was another volatile session, crude oil prices eventually settled below their previous close after trading higher earlier in the day. U.S. crude and gasoline stocks rose by more than expected last week which influenced the losses, although downside was limited. Near-term supply concerns reduced as full output has now been restored at the Norwegian Johan Sverdrup oilfield.  Heightened tensions in the Ukraine war which could potentially disrupt oil supply and other energy infrastructure in Russia, ensured potential declines were mitigated. The front month Brent contract posted a 50 cent day-on-day decline to end the session at $72.81 a barrel. WTI for January 2025 delivery made a similar loss, falling by 49 cents to close-out the day at $68.75 a barrel.  

Markets this morning

Yesterday’s upward momentum on the NBP has continued into this morning, with all traded contracts currently residing above their previous close. The December 2024 contract last went through at 119.50p per therm, up 2.35p day-on-day. The GB system is this morning well supplied, with LNG sendout remaining high once again. Ten LNG cargoes are expected to arrive into the U.K. between now and the 3rd December, with a need to make space in LNG storage facilities driving the recent upturn in flows. Front month Brent is up by just over a dollar this morning on escalating tensions between Russia and Ukraine. Brent for January delivery last transacted at $73.82 a barrel.