Near months on the NBP have declined by an average of 5.35p per therm over the last three sessions

Gas Market

After Wednesday’s significant declines, there was some sideways movement for the front of the NBP curve on Thursday morning.  The prompt had opened lower by around a penny in response to the lower demand and a comfortable outlook for the rest of the week and losses were extended through the session with the Spot closing 2.50p per therm lower.  NBP futures struggled to find direction early on but in the afternoon, contracts started to retreat and the front month, January, settled 1.24p lower at 116.00p.  The Polish gas grid operator is to offer firm capacity to Ukraine on a long-term contract although it is believed the firm capacity is only around 5mcm per day. However, talks between Ukraine’s grid operator and Slovakia could guarantee up to 42mcm per day of firm capacity until the end of 2026.  

Power Market

 GB baseload futures settled with modest losses yesterday as the market looked to the NBP for direction.  The fall of £0.35/MWh for the front month brought the loss to £4.25/MWh for the last three sessions. Contracts a little further along the curve, notably those covering next summer lost around £1.00/MWh yesterday.  Carbon prices weighed later as EUAs also extended the current loss run to three days. The Spot eased by 67 cent to close at €67.20. Baseload for the Day ahead tumbled again yesterday with a further £13.98/MWh or almost 15.0% drop.  Wind generation topped 17.0GW yesterday and is forecast around 25% lower for today but next week forecasts could see wind drop below 10.0GW.    Oil Market Crude oil prices eased on Thursday shrugging off the confirmation that OPEC+ is to delay unwinding its voluntary cuts until April.  The Organisation of Petroleum Exporting Countries along with Russia and other producers are to increase production by around 125,000 barrels per day from April with the full 2.2m bpd of cuts being unwound in monthly stages before the start of Quarter 4 2026. The news was widely expected but if demand does not pick up the extra production may flood the market especially if Donald Trump steps up U.S. production after he comes into power in January.  The dollar has remained bullish against a basket of currencies since Trump’s re-election, but the greenback eased a touch yesterday which also limited losses on the day.  

Markets this morning

The announcement of postponed production increases from OPEC+ yesterday has brought weak demand back into focus and crude oil prices have softened this morning.  The February contract for Brent is down 43 cents to $71.66 a barrel on the latest trade while West Texas Intermediate has shed 34 cents to $67.96 a barrel. The GB gas system is showing a deficit this morning and supplies are lagging by around 9mcm as demand is up slightly.  Prompt prices have ticked up with the Day ahead price for Monday going through at 116.00p per therm on lower wind forecasts.  NBP futures are moving in the opposing direction with the front two months down by almost a penny.