Gas Market
NBP curve prices shrugged off the geopolitical developments in Syria over the weekend to open Monday in negative territory. Losses gained pace as the day progressed with the near months averaging a day-on-day decline of 4.31p per therm. January-25 closed at its lowest level in 4 weeks, falling by 4.41p to end the session at 111.46p per therm. Weather forecasts were revised warmer for the coming days, with the return of above-average temperatures expected next week as well hampering any upward potential on the prompt market. The Day ahead contract posted a 3.30p loss to end the day at 111.30p per therm. Comfortable supplies from Norway and strong LNG sendout ensured the GB system was well supplied, which helped the Within day contract fall by 3.45p per therm day-on-day.
Power Market
Bearish activity on the NBP gas market weighed on GB Baseload contracts on Monday, with the near months averaging day-on-day losses of £2.83/MWh. January-25 posted the most substantial decline, falling by £3.18/MWh to end the session at £95.33/MWh. A downward revision to wind power projections for the rest of the week supported the prompt market, with the Day ahead contract increasing by 17.7% day-on-day.
European carbon prices fell by their biggest margin in six months, edging down in value on Monday ahead of the upcoming expiry of the December-24 option. UK Allowances were similarly weak, falling to their lowest levels in seven months amid low gas-fired generation and regulatory uncertainty.
Oil Market
Crude oil prices edged up on Monday as a loosening of monetary policy in China and a potential new wave of instability in the Middle East drove prices up. China signalled its first move towards easing monetary policy since 2010 on Monday, aiming to bolster economic growth, which could subsequently result in increased fossil fuel demand in the region. The developments in Syria over the weekend after the ousting of Assad added a new layer of political uncertainty in the Middle Eastern region, which added further support. There were also reports that Saudi Arabia had decided to cut its official selling prices for refiners in Asia to the lowest level in four years in an effort to boost demand, which also drove an element of the upside. Front month Brent increased by $1.02 to end the session at $72.14 a barrel.
Markets this morning
NBP curve products are up slightly this morning, with the front month contract last going through at 111.88p per therm, up just 0.42p on Monday’s close. Fundamentals are mixed, with warmer temperatures expected over the coming days as well as LNG deliveries remaining strong at odds with higher gas-for-power demand levels for the rest of the week due to low winds. There are currently 11 LNG cargoes expected to arrive into the UK over the next 17 days, while European gas storage is now at 82.05% fullness. Crude oil prices have edged down slightly, largely on supply glut fears despite the OPEC+ output cut extension. Brent for February delivery last went through at $71.95 a barrel, up just 19 cents day-on-day.
10 December 2024
