NBP prices continued to decline gradually on Wednesday as the Israel-Hezbollah ceasefire weighed on near-dated contracts  

Gas Market 

In a continuation of Tuesday’s decline, NBP prices fell further on Wednesday, although a late rally on the front month threatened to eradicate the earlier losses. Having reached an intraday low of 115.00p per therm, the December-24 contract settled at 116.99p per therm, down 1.30p day-on-day. The near months are now down by an average of 2.9% week-on-week. While the news that a ceasefire between Israel and Lebanon had indeed come into effect played into the losses, the emergence of further details relating an unplanned outage at the Pluto LNG facility in Australia limited losses. An upward revision to both temperatures and wind power generation levels placed downward pressure on the Spot and prompt, with both the Within day and Day ahead contracts falling by 1.05p per therm day-on-day.  

Power Market

The downward momentum exhibited by the NBP gas curve on Wednesday fed into losses across GB Baseload contracts. A decline in UK carbon allowances also weighed on prices, with the front month contract posting a £1.35/MWh loss to end the session at £93.35/MWh. An upward revision to wind power generation levels provided short-term downside, with the Day ahead contract falling by £2.53/MWh to close the day at £106.00/MWh. European carbon prices fell to their lowest level in 5 days on Wednesday morning, driven by a fall across gas markets. EUAs for December-24 fell by €0.53 to end the session at €68.39 a tonne, while UK Allowances for December-24 posted a £0.89 loss to close at £36.04 a tonne.  

Oil Market

Oil prices edged sideways on Wednesday as markets evaluated the impact of the ceasefire deal between Israel and Hezbollah. The ceasefire, which came into effect on Wednesday morning, appeared to be holding as the day progressed, although the market remains tentative as to whether or not the agreement will be observed in the long-term. A meeting of OPEC+ members set for Sunday where the group is expected to discuss a further delay to the oil output increase set for January also kept movements steady. Brent for January delivery closed up by just 2 cents day-on-day to settle at $72.83 a barrel. The WTI front month contract was similarly flat, posting a 5 cent loss to close the day at $68.72 a barrel.    

Markets this morning

Warmer temperatures and higher wind output levels expected for the rest of the week have fed into further losses on the Day ahead contract this morning, with the contract last going through at a 1.15p discount to yesterday’s close. Easing geopolitical tensions between Israel and Lebanon continue to weigh on near-dated contracts. On its final day trading as the front month, December-24 last transacted at 115.30p per therm, down 1.69p day-on-day. Oil prices remain steady, with trading expected to be light today due to the U.S. Thanksgiving holidays. Front month Brent last went through at $72.89 a barrel, up just 6 cents on Wednesday’s close.