After five days of losses the front month for the NBP, January, added 1.45p per therm yesterday

Gas Market  

The January contract’s run of declines was halted after five days of losses as the market corrected yesterday following the sharp fall on Monday.  The front month for the NBP added 1.45p per therm having shed over 10.00p for the previous five sessions as earlier losses were reversed over the session on Tuesday. An unplanned outage at the Asgard field supported prompt prices on the continent which in turn lifted the NBP prompt.  Planned deliveries of LNG limited the gains yesterday and the Spot was a penny higher at 112.58p while the Day ahead added 1.30p as demand is expected to increase to counter for lower wind generation later in the week. UK ports have received seven LNG deliveries so far this month with a further twelve more on route and expected by the end of the month.  

Power Market

Baseload futures tracked the NBP gas curve higher in the afternoon session on Tuesday as near months settled an average of £1.50/MWh higher. The front month added £1.83/MWh but remains £5.32/MWh down for the last week.  Higher carbon also added some upside yesterday as EUA contracts out to Dec-2026 increased by 2.7% ahead of the options expiry on Wednesday. Forecasts for low wind generation sent the Day ahead to a fresh high for the year yesterday as the contract settled at £180.96/MWh. Wind is expected to fall below 5.0GW on Wednesday and decline further going into the weekend having averaged almost 15.0GW for the past week.   

Oil Market

After some earlier volatility, the crude oil markets moved sideways on Tuesday as both benchmarks recorded minor gains.  The February contract for Brent added just 5 cents a barrel while West Texas Intermediate for January delivery settled 22 cents a barrel higher.  Earlier support from a looser fiscal policy for 2025 from the Chinese government and increased crude oil imports during November were countered later in the session with news that Syria’s oil sector was to resume operations.  Although not a large oil producer, Syria has strong links with Iran and Russia and the news lowered the risk of possible oil disruption in the region. The U.S. Federal Reserve is due to meet next week and it’s not clear at this stage if the Fed will reduce interest rates again, but much will depend on this week’s U.S. inflation data.  

Markets this morning

A compressor failure at Kollsnes has added to the Norwegian export woes this morning but just 6mcm of supply is expected to be impacted for the next 5 days while the issue is rectified.  The GB gas system is forecast long against today’s demand of 333mcm, and LNG send out is a robust 99mcm as facilities make room for impending deliveries.  In the markets, prompt prices are unmoved so far but near months are down by around a penny having traded within +/- 1.50p of last night’s close. Crude oil prices have opened higher with Brent for February delivery adding 70 cents to last exchange at $72.89 a barrel.