Near NBP futures climbed rapidly over the afternoon yesterday with January eventually settling 5.83p higher at 107.33 per therm

Gas Market

After trading sideways for most of the morning NBP futures rose sharply from around midday after the Russian President remarked that there would be no transit deal through Ukraine.  This was not news to the market, indeed the few countries taking Russian gas that transits through Ukraine have already put alternates in place. Poland is looking to send LNG imports to be stored in Ukraine for transit to western Europe while Austria has increased storage capacity and is to source gas from an alternative.  Near futures climbed rapidly over the afternoon with January eventually settling 5.83p higher at 107.33 per therm. Contracts out to next summer were all over 4.00p up at the close.  Prompt prices also spiked yesterday with the Spot 6.38p higher at the close while the Day ahead added 7.38p with compressor and process failures curbing Norwegian exports through Kollsnes and Karsto which also added to the upside.  

Power Market

The volatility in the gas market spilled over into the carbon and baseload power markets yesterday. Near curve contracts for GB baseload settled an average of £4.20/MWh higher yesterday while the Summer-25 product was marked £3.70/MWh to settle at £79.45/MWh.  Carbon EUAs were buoyed with contracts recording the largest one-day gain in ten-weeks.  The Dec-25 contract for European Allowances settled 4.6% higher at €67.79 per tonne. Baseload for the Day ahead settled higher on Thursday with support from the corresponding contract on the NBP countering the downward pressure of strong wind generation.  The contract closed well below the average price for the month so far at £76.32/MWh.  

Oil Market

Crude oil prices eased on Thursday despite U.S. Fed announcing a second interest rate cut on Wednesday.  Normally a drop in the interest rate would spur on crude oil prices as it gives borrowers more spending power and thus increases demand. However, Wednesday’s rate cut which was expected, was followed by a note of caution from the Chair, Jerome Powell, who said that inflation was still stubbornly high and further rate cuts would depend on further improvement in the economy. The dollar strengthened yesterday and applied pressure to crude oil prices which have struggled to gain momentum this week due to poor demand outlook for 2025. At the close Brent was 51 cents down at $72.88 a barrel.  

Markets this morning

The NBP curve opened firmer this morning, continuing on from last night’s sharp gains.  The front month opened at 111.40p per therm but latest trades have seen the January contract drop back by over 2.00p intra-day to 109.10p. Trading for the prompt has been slow to get off the mark this morning but a short gas system is likely to offer support.  Trading for carbon EUAs is also slow and the Dec-25 contract is up 41 cent per tonne in early exchanges.  Brent has eased by 73 cents to $72.15 a barrel this morning as the dollar remains robust and demand growth for 2025 is a concern.