A bullish carbon market supported natural gas futures on Friday as near months for the NBP settled an average of 1.86p per therm higher

Gas Market

 NBP futures tracked Dutch gas prices higher on Friday and near months settled an average of 1.86p per therm higher. The TTF rose on the back of higher carbon EUAs on the day as the Spot price for European allowances climbed to a 14-month high. Friday’s gain of 1.92p for the front month of the NBP reversed most of the previous session’s loss and brought the gain for the week to 5.24p. The prompt opened softer on Friday but a short gas system and later a pull back on the forecast for wind for the week ahead provided support across the board. Later reports of an unplanned outage at the Gullfaks gas field topped off a volatile session for the prompt.  The Spot and Day ahead products ended the session 5.20p higher while the Balance of month contract also added 5.20p to close at 124.10p.  

Power Market

Wind forecasts were revised lower on Friday which sent the Day ahead product for Monday higher by 49.4%. At the close, Monday’s price was up £52.57/MWh to £159.07/MWh.  The increase in gas futures provided the upside for GB baseload futures on the day with the February contract adding £0.50/MWh to close at £96.20/MWh.  A little further out, the Summer-25 contract settled at £86.65/MWh, up £1.68/MWh. Speculative trading drove carbon European allowances higher on Friday with contracts out to 2027 adding an average of 2.15% or €1.73 per tonne.  The Spot closed at a 14-month high of €77.52 per tonne, up €1.57.  

Oil Market

Crude oil prices eased on Friday but racked up the fourth weekly gain in a row after the U.S. sanctions on Russia propped up prices earlier in the week. A stronger dollar ahead of the U.S. president’s inauguration weighed on crude oil prices on Friday, a bullish greenback makes dollar denominated commodities more expensive to holders of other currencies. The market is anxious to see if Donald Trump reintroduces sanctions on Iran and Venezuela which could reduce global crude oil supplies. More bearish news for the market was the ceasefire between Israel and Hamas, which was finally agreed on Friday. This should see a return to shipping vessels using the Red Sea and thus lowering costs and improving delivery times.  

Markets this morning

It’s been a subdued opening to the energy markets this morning.  The GB gas system is showing a deficit this morning and prompt prices have yet to respond as the Spot and Day ahead products are flat.  NBP futures have opened lower but latest trades for the near curve are within a penny of Friday’s close.  February, the front month for the NBP, is down 0.48p per therm at 117.83p while the Summer-25 contract last exchanged at 114.90p, down 1.07p.  Carbon prices have reversed some of Friday’s gains and in the crude oil markets, Brent is 36 cents a barrel down at $80.43, as the market awaits the new U.S. presidents’ first moves later.