Gas Market
Following Monday’s sharp gains, the market appeared poised to maintain its momentum as prices traded close to Monday’s close through the morning. The front-month contract remained within a tight 1p range, oscillating half a penny either side of Monday’s 121.50p/th settlement. Similarly, the Summer-25 contract peaked at 118.72p/th, showing a modest gain of 0.11p from the previous settlement. However, sentiment shifted in the afternoon. The market grew more confident about the UK’s storage levels, especially in comparison to aggregate European storage, and concerns over the potential risks tied to an alleged attack on the TurkStream pipeline began to ease. By the afternoon, the front-month contract hit a low of 117.35p/th before settling at 118.62p/th, marking a day-on-day decline of 2.67p. The downward trend extended along the curve, with the Summer-25 contract settling 3.60p/th lower at 115.00p/th.
Power Market
The GB Baseload Day-ahead power contract remains elevated, increasing by over 13% day on day amid a continued lack of wind generation on the GB system. The cold start to 2025 coupled with low wind has led to the average baseload day ahead contract increasing by 23% when compared to the December 2024 average. Along the curve prices tracked the losses on the NBP with the near curve contracts shedding an average of £2.43/MW.
On the EUA markets, the Dec-25 having started the session trading lower, found late support and settled at €77.18/tonne, marking a year-to-date high. Carbon prices rallied in isolation ignoring the losses on European gas and power markets to register a day on day increase of 31 cents.
Oil Market
Brent Crude experienced a pullback during Tuesday’s session, with the front-month contract declining by $1.09 to settle at $79.92/bbl. This marked a retreat from Monday’s five-month high as the market continued to assess the implications of the latest round of U.S. sanctions against Russia. Despite the day-on-day dip, Brent Crude remains elevated, reflecting a 9% gain since the start of 2025. The price adjustment came as market participants weighed the potential effects of the sanctions, with expectations that they may only serve to bring global supply and demand into closer alignment amid continued uncertainty surrounding Chinese demand. Additionally, the market is on tenterhooks as we get ever closer to Trump’s inauguration, and the market tries to anticipate his stance on the latest sanctions.
Markets this morning
The NBP Forward curve has recovered approximately half of yesterday’s losses in early exchanges this morning. The February contract last traded 1.25p/th higher at 119.87p/th, while the summer contract last exchanged hands at 117.50p/th. On the prompt prices are relatively flat reflecting the balanced GB system this morning that is a mere 9mcm long. Brent crude oil is inching higher this morning as the focus remains firmly on the latest sanctions as the impact on supplies. However, the market remains unclear on their actual impact which is limiting the gains.
15 January 2025
