The NBP retraced much of Tuesday’s gains on Wednesday during a choppy session.

Gas Market

The NBP retraced much of Tuesday’s prompt and curve gains on Wednesday during a choppy session where the front month contract traded a range of just under 5.00p per therm. Having reached a session high of 105.48p per therm, January-25 went on to close the day at 101.50p per therm, down 2.79p day-on-day. Mild weather conditions as well as reduced demand levels during December has meant that British storage reserves have not been excessively drained, with fullness levels currently standing at 63.0%. Downside on the day however was capped by ongoing uncertainty surrounding the Russia-Ukraine transit deal. Short-term pricing was similarly weak with the Within day and Day ahead contracts posting losses of 1.00p and 1.97p respectively.  

Power Market

Prices across the GB Baseload curve followed the direction of the NBP gas market down on Wednesday. The January-25 contract shed £2.13/MWh day-on-day to close at £87.75/MWh, while Q1-25 posted a £1.80/MWh loss to end the session at £86.00/MWh. With weather forecasts remaining largely unchanged, the Day ahead contract traded sideways, finishing just £0.10/MWh higher day-on-day at £62.50/MWh. European carbon prices diverged somewhat from the influence of gas markets on Wednesday, with contracts edging up marginally. The Dec-25 EUA increased by €0.19 to close the day at €64.84 a tonne. UK Allowances moved similarly, with Dec-25 moving up by £0.05 a tonne day-on-day.    

Oil Market

Crude oil prices traded sideways on Wednesday as the market remained tentative ahead of a potential interest rate cut by the U.S. Federal Reserve and its projections for 2025. As expected, it was confirmed late on Wednesday that the Fed would indeed cut interest rates, although it also signalled that it would slow the pace of cuts. The news had limited impact on market activity, with the front month Brent contract gaining just 20 cents day-on-day to settle at $73.39 a barrel. Lower interest rates generally provide upside for oil prices as they tend to result in higher consumer spending and greater borrowing activity by businesses, which both lift oil demand. The front month WTI contract posted a 50 cent gain to close out the session at $70.58 a barrel.    

Markets this morning

After initially opening above the previous close, the January-25 contract last went through at 100.50p per therm this morning, down 1.00p day-on-day. Fundamentally the market remains largely unchanged, with temperatures and wind speeds consistent with yesterday. The Spot market is quiet so far, while the Day ahead contract has edged down, last transacting at a 0.77p discount to Wednesday’s close. The GB system is short this morning, despite stable supplies from Norway, although LNG sendout is down a touch. Crude oil prices are trading sideways as the market digests the news that the U.S. Federal Reserve would cut interest rates in 2025. Front month Brent last went through at $73.36 a barrel, down just 3 cents day-on-day.