European Gas storage levels continued to provide support to NBP near curve contracts

Gas Market

NBP near curve contracts traded sideways on Tuesday, remaining near to their 13-month highs as gas storage levels across Europe were lower than the last two years and continued to support prices. Colder temperatures in November have driven European gas storage levels down to an average 84.65% full, a sharp drop compared to 94% on the same date in 2023 and 92% in 2022. The Day ahead declined a mere 0.40p as higher than average wind generation and an increase in Norwegian nominations into Easington countered concerns against storage levels. The market has adopted a more optimistic outlook further along the curve, with Summer-25 down 0.55p to settle at 111.95p/therm, while Winter-25 declined by 1.24p to 108.43p/therm.

Power Market

Prompt and curve contracts across the GB Baseload market mirrored NBP contracts on Tuesday with modest declines across the near and forward curve. Winter-25 tracked the NBP gas market, posting a £1.02/MWh loss by the close to end the session at £88.65/MWh. The Day ahead contract climbed a further 7.5% on the back of yesterday’s increase, despite higher temperatures and wind output. European carbon prices eased slightly on Tuesday, tracking TTF natural gas. Contracts for Dec-24, Dec-25, and Dec-26 each fell marginally by an average of 48 cents per tonne. This decline comes after two consecutive bullish sessions, driven by concerns over Europe’s lower-than-normal gas storage levels.  

Oil Market

Global oil prices rebounded on Tuesday, with Brent crude for February delivery rising 2.5% to $73.62 per barrel. The increase was driven by anticipation ahead of the upcoming OPEC+ meeting, where the group is expected to announce a delay in planned production increases beyond January 2025. While OPEC+ has aimed to unwind production cuts, a global oil surplus and prices approximately 6% lower than a year ago make an immediate increase in output unlikely. Additional support for oil prices comes from continued geopolitical tensions in the Middle East. A fragile ceasefire between Israel and Hezbollah remains at risk, with Israel threatening a return to war with Lebanon after experiencing its deadliest day since the ceasefire began. There is a risk that a collapse in the truce could disrupt regional oil supplies.  

Markets this morning

Near-curve gas contracts have opened over 2% lower, driven by forecasts of milder temperatures and stronger wind speeds, which are reducing short-term demand. LDZ and gas-for-power demand is projected to drop by 75 mcm per day, roughly 29%. The January contract was last traded at 118.78p/th, down by 2.79 pence, while trading on the prompt has been sparce. Weak European gas prices are also pressuring carbon markets, with the Dec-24 carbon contract losing 80 cents in early trading this morning. Meanwhile, Brent crude is holding on to Tuesday’s gains as the market anticipates tomorrow’s OPEC+ meeting, where confirmation is expected that oil production will remain unchanged in January.