Gas Market
NBP gas prices have continued their recent rebound following last week’s decline, increasing by 13.5% since last Wednesday. Prices have been bolstered by short-term supply issues at several Norwegian processing plants. Initially, the Nyhamna plant was supporting prices until the issue there was resolved. Subsequently, the Karsto processing plant experienced an unplanned outage, reducing capacity, with the disruption lasting longer than anticipated. Additionally, a minor issue at the Kollsnes processing plant has led to a 5mcm reduction in capacity. As a result of these curtailments, the UK system was forecast to be 18mcm short on Monday, which has further supported prices. Adding to the upward pressure is the imminent end of the Russia-Ukraine transit deal, which may reduce gas flows from the new year and could result in more expensive gas being shipped to Eastern Europe from alternative sources.
Power Market
Rather predictably, the gains in the NBP gas market were reflected in the GB Baseload futures market. Price increases were more pronounced on the near curve, with the front month rising by £5.30/MW, while the summer contract increased by £2.85/MW, reflecting the increasing risk premium that has been building in near-curve gas and power contracts. On the prompt, falling wind speeds and increasing gas prices led to Day ahead baseload prices rising by 25% since last Friday.
European carbon prices rose by €2.10 per tonne in trading on Monday. With European gas prices climbing daily, the European allowances market has been closely following this trend, with few other influencing factors, as the market begins to wind down for Christmas.
Oil Market
Crude oil prices declined in trading on Monday ahead of the Christmas holiday period. Prices were pressured by ongoing expectations of a supply surplus for 2025. Macquarie is the latest institution to release a report indicating a supply surplus for 2025, which they forecast will keep Brent crude at an average of $70.50 per barrel. Brent crude’s front-month contract has averaged $79.91 per barrel so far in 2024. Adding to the downward pressure on prices was the resumption of oil flows through the Druzhba pipeline, which transports Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic, and Germany. Flows through the pipeline had been halted last Thursday due to technical issues at a Russian pumping station. At the close of trading, Brent’s front-month contract was assessed at $72.63 per barrel, while its WTI counterpart was assessed at $69.24 per barrel, with additional pressure stemming from a strengthening dollar.
Markets this morning
NBP curve prices have opened higher once again on this shortened trading day. Markets close today, Christmas Eve, at 12 noon but this has not stemmed the upward momentum as prices edge closer to their recent highs. Jan-25 last exchanged hands at 115.92 p/th an increase of 1.81 pence from Monday’s close as we approach the expiry of the Russia-Ukraine transit deal. With the issue at the Karsto plant extended by a further day, the prompt is also continuing its upward trend, with Day ahead last trading at 114.50p/th. Crude oil prices have increased marginally in thin trading ahead of the closure for Christmas last trading at $73.13/bbl.
24 December 2024
