Gas Market
NBP curve contracts initially opened Friday’s session in negative territory, with prices moving down throughout the morning. However, direction changed in the afternoon on reports of new U.S. sanctions against Russian oil and LNG. Further upside was gleaned from an announcement from Centrica which pointed to “worryingly low” levels of gas in storage. However, Britain’s Department for Energy Security (DESNZ) said it had no concerns about the country’s energy supplies. Despite this, the Q3-25 contract ended the session at 110.23p per therm, a 0.76p premium to its previous close. The front month contract edged up by just 0.14p to close the week at 113.07p per therm. An upward revision to temperatures and wind generation levels for this week weighed on the Day ahead market, with the contract decreasing by 0.63p day-on-day to settle at 115.05p per therm.
Power Market
Having initially moved down during early trade on Friday, GB Baseload curve contracts followed the upward movement experienced across a mix of European energy contracts on news of new U.S. sanctions against Russian oil and LNG. February-25 gains were muted, with the front month contract increasing by just £0.25/MWh day-on-day, while increases were more pronounced further out, with the Winter-25 contract moving up by £1.00/MWh.
The surge in oil prices and other energy markets on Friday afternoon supported European carbon contracts. Dec-25 European Allowances increased by €1.35 to close the session at €74.85 a tonne, while 2025 UK Allowances increased by 2.7% day-on-day.
Oil Market
Crude oil prices rallied by 3.7% on Friday on news that the U.S. will target the Russian oil industry with one of the harshest sets of sanctions to date. As stated in a U.S. Treasury document, President Joe Biden’s administration will impose fresh restrictions targeting Russian oil producers, tankers, intermediaries, traders and ports, aiming to hit every stage of Moscow’s oil production and distribution chains. These sanctions on the world’s third largest oil producer have intensified concerns over near term supply tightness. The front month Brent contract closed at its highest level since early October, ending the session at $79.76 a barrel, an increase of $2.84 day-on-day. WTI for February delivery posted an increase of $2.65 to settle at $76.57 a barrel.
Markets this morning
NBP prompt and curve prices have strengthened this morning, with the front month contract last going through at a 5.77p per therm premium to Friday’s close. Concerns over British storage levels continue to support prices, largely driven by widespread media coverage of the nation’s storage position, despite Britain’s Department for Energy Security stating they have no concerns for the country’s energy supplies. Gas-for-power demand levels are higher than previously forecast due to a downward revision to wind speeds, while the GB system is this morning undersupplied by 14 mcm/day. Crude oil prices have also continued to strengthen this morning, with the front month Brent contract gaining $1.14 a barrel on Friday’s close
13 January 2025
