Gas Market
The NBP retraced the previous sessions’ gains and more on Wednesday, with the near months averaging losses of 4.19p per therm. Having reached an intra-day high of 119.00p per therm early in the session, the front month contract went on to close at 114.03p per therm, a touch above its low of the day. Direction on the Spot market was at odds with prompt and curve movements. Norwegian exports were up day-on-day after Tuesday’s outage at the Kollsnes facility, however the GB system remained undersupplied for much of the day, causing the Within day contract to increase by 0.83p to close at 117.83p per therm. Day ahead however declined by 3.52p to settle at 116.83p per therm, despite forecasts for lower wind generation levels for the rest of the week.
Power Market
GB Baseload prompt contracts shrugged off concerns over well below temperatures and wind generation levels for the rest of the week, with the Day ahead product falling by 31.7% day-on-day to close the session at £106.75/MWh. Along the curve, prices tracked the downward movements of the NBP gas market throughout the day, with the front month contract decreasing by £2.88/MWh to settle at £94.38/MWh. The near months averaged losses of £3.21/MWh.
EU carbon allowances followed the downward trend set by gas markets on Wednesday, with the Dec-25 contract falling by €2.02 to close out the day at €72.29 a tonne. UK Allowances similarly declined, with Dec-25 settling at £34.50 a tonne, down £0.10 day-on-day.
Oil Market
Early gains across crude oil markets on Wednesday, driven by tightening supplies from Russia and other OPEC members, were wiped out later in the session due to a strong U.S. dollar and large builds in U.S. fuel inventories. A stronger dollar can pressure prices down as it makes the commodity more expensive to buy for holders of other currencies. The front month Brent contract fell by 89 cents day-on-day to end the session at $76.16 a barrel. Limiting the losses were reports that suggested OPEC+ member Russia was producing oil below target levels in December, possibly a result of tightened sanctions. OPEC will publish its monthly report for January on the 15th of the month which will likely confirm these reports.
Markets this morning
NBP curve prices are continuing yesterday’s downward trend this morning. The front month contract last transacted at 112.80p per therm, a discount of 1.23p on the previous close. A short system is supporting the Spot market with Within day up by 0.17p at the most recent trade. Gas-for-power demand has increased day-on-day due to lower wind speeds, while residential demand, while currently elevated, is expected to tick lower from Friday. Crude oil prices are steady this morning, as the market weighs up firm winter fuel demand expectations against large U.S. fuel inventories and macroeconomic concerns. Front month Brent last went through at $76.26 a barrel, up just 10 cents day-on-day.
09 January 2025
