Gas Market
NBP gas prices firmed on Monday in a continuation of Friday’s upward trend. Russian gas exports through Ukraine to Europe were reported to be down by more than 3.0% on Sunday and Monday from levels seen in recent months, adding to the general sense of unease surrounding gas supplies as we get deeper into winter and storage levels continue to decline. European gas storage levels currently sit at 85.2% full, a healthy level, but still more than 10.0% below levels this time last year. The January-25 contract posted a 2.06p gain to end the session at 121.62p per therm. Updated weather forecasts pointing to colder than normal temperatures from the middle of December lifted the Next week contract, which settled 5.55p above its previous close. Despite opening long, the GB system moved to a short position later in the day, supporting the Spot. Within day increased by 4.55p to end the day at 121.55p per therm.
Power Market
Prompt and curve contracts across the GB Baseload market were lifted on Monday, with the biggest gains seen on the Day ahead contract. The front month tracked increases on the NBP gas market, posting a £2.30/MWh gain by the close to end the session at £103.00/MWh. The Day ahead contract climbed by 20.9% despite within-average temperatures and wind output for the rest of the week expected to be 20% above normal.
European carbon prices tracked movements on the gas markets throughout the day on Monday, opening in positive territory before the strength eased off somewhat. Prices still settled above their previous close, with the Dec-24 EUA contract closing at €68.67 a tonne, up 28 cents day-on-day.
Oil Market
Conflicting fundamentals in crude oil markets on Monday ensured prices remained range-bound throughout the session, but ultimately declined day-on-day. In a change to the recent slate of dower economic indicators from China, strong factory activity numbers from the region for November reflected some degree of policy success from the recent stimulus packages. Subsequent hopes of stronger demand from China was largely offset however by concerns that the U.S. Federal Reserve will not cut interest rates again at its December meeting. An increasingly fragile ceasefire between Israel and Hezbollah also limited downside. Brent for January delivery closed flat against its previous close at $71.83 a barrel. The front month WTI contract also moved sideways, increasing by 10 cents day-on-day to close at $68.10 a barrel.
Markets this morning
Having opened this morning’s session a touch below Monday’s close, the front month contract last went through at 121.70p per therm, up 0.08p day-on-day. Other active near months are still trading in negative territory so far. Higher day-on-day Norwegian flows into the UK are expected to weigh on prompt prices, although trade on those contracts is yet to get going. Wind speeds are also stable and expected to pick up over the coming days while temperatures are also expected to increase during the week. Crude oil prices continue to trade sideways, with marginal upside provided this morning by expectations that OPEC+ will likely extend its latest round of output cuts at its meeting on Thursday.
03 December 2024
