NBP Gas prices rebounded on Tuesday following three days of losses

Gas Market

Gas prices rebounded on Tuesday afternoon after the front-month contract briefly dipped below 100 p/therm. The decline in near-curve contracts likely triggered buying activity as prices reached key thresholds. Adding further support, Norwegian operator Gassco reported an extension of an unplanned outage at the Nyhamna gas processing plant, reducing capacity by 30.9 mcm to approximately 48.9 mcm. Consequently, the NBP front-month January 2025 contract closed at 104.29 p/therm, an increase of 3.90p. Additionally, renewed concerns over Russian gas supplies to Europe from January may have bolstered NBP and TTF prices. This follows a statement from the European Commission asserting it has “no interest in continued Russian gas transit via Ukraine.” However, this risk could already be priced in, as the current five-year transit agreement allowing Russian gas flows through Ukraine is set to expire at the end of the month.

Power Market

The rebound seen in the NBP was reflected in the GB Baseload power futures market. The January 2025 contract rose by £2.55/MWh, settling at £89.88/MWh, while the front season posted a similar gain, closing at £76.93/MWh. In contrast, the Day ahead baseload contract experienced significant losses, driven by wind generation far exceeding seasonal norms. Elevated wind output reduces reliance on costlier gas-fired generation, contributing to a £22.15/MWh decline in the Day ahead contract. So far in December 2024, wind generation has been 30% higher than the 2019–2023 average, helping to suppress GB Baseload Day-Ahead prices throughout the month.  

Oil Market 

Weak economic data from Germany and China fuelled concerns about oil demand in 2025, pushing prices lower on Tuesday. China, the world’s largest oil importer, reported industrial output growth in November, but retail sales fell short of expectations, increasing pressure on Beijing to implement more consumer-focused stimulus measures. In Germany, a survey indicated a more pessimistic business outlook for 2025, as the economy appeared set to end a second consecutive year of stagnation. These demand worries led to a 1.0% drop in the front-month Brent crude contract, settling at $73.19 per barrel. Meanwhile, stronger economic data from the US had limited impact, as markets awaited confirmation of an anticipated interest rate cut by the Federal Reserve on Wednesday.  

Markets this morning

The NBP gas market has resumed its decline this morning after Tuesday’s rebound. The front-month contract has dropped over 3.00p/th in early trading, while the summer-25 contract has fallen by more than 2.50p/th. LNG send-out from regasification terminals remains robust, with nine LNG cargos expected to arrive by January 2. Meanwhile, strong winds and mild temperatures are reducing gas demand for power gen, adding downward pressure on prices. In contrast, front-month Brent crude has risen slightly in early trading, with the market anticipating the US Federal Reserve’s decision on an interest rate cut later today. Carbon prices, however, are defying the gas market trend, as the absence of EUA auctions until the new year is curbing the supply of carbon credits.