Intra-day gains of up to 5.00p per therm were almost completely reversed on Thursday

Gas Market

GB wholesale gas prices opened firmer with early gains of around a penny being extended to over 3.50p per therm by mid-morning on Thursday.  The front month of the NBP, February, peaked at 127.69p helped by a tight gas system and expected rise in gas demand next week.  However, reports that Freeport LNG had increased nominations after power outages caused the market to reverse direction in the afternoon and the lion’s share of the intra-day gains of almost 5.00p were eroded by the close of play. Nominations for Freeport for Thursday were still around 20% of the average nominations made during December.  February settled at 123.50p, moving 0.63p higher day-on-day while a little further out, the Summer-25 contract edged 1.21p higher to close at 120.90p.  

Power Market

GB baseload futures were buoyed by the early gains witnessed on the NBP curve while a bullish start to carbon EUAs also added support.  The February contract was marked £2.03/MWh higher and settled at £102.63/MWh while the March contract was assessed at £96.60/MWh, up £0.95/MWh day-on-day.  Carbon EUAs hit fresh 15-month highs yesterday but eased back as gas retreated off earlier peaks and the Dec-25 contract settled at €80.72, up €1.55 per tonne. Baseload for the Day ahead eased yesterday due to the forecasts for high winds.  The contract fell by 17.0% or £18.45/MWh and settled at £90.34/MWh.  Wind generation is forecast to meet over 41.0% of demand on Friday while gas fired generators will account for around 26.0% of power demand.  

Oil Market

Crude oil prices continued to soften on Thursday as the market weighed up the new U.S. President’s proposed energy policies.  Donald Trump has called on Russia to end the war or face more sanctions.  It’s believed that more restrictions on Russian crude oil exports and new tariffs on imports could threaten global demand growth.  The new President also called on OPEC to lower oil prices in an address to World Economic Forum in Davos. An increase in drilling activity as he promised before being elected, would boost supplies and reduce prices.  U.S. crude oil stocks were near a three-year low last week, but the draw down on reserves was less than anticipated last week and this added to the downside late in the session. At the close, Brent for March delivery was down 71 cents to $78.29 a barrel.  

Markets this morning

As Storm Eowyn makes its way past Ireland and onto Scotland and Northern England the energy markets are moving sideways too this morning.  NBP futures opened around a penny higher, but gains have been pared back with contracts at the front of the curve testing negative territory.  February last traded at 123.30p per therm, down 0.20p while the Summer-25 contract is 0.15p lower at 120.75p.  Prompt prices are also flat save for the Day ahead product which is almost a half a penny up on yesterday’s settlement.  GB gas demand is pitched at 274mcm for today and supplies are lagging by 18mcm.  In the crude oil markets, Brent is 11 cents up at $78.40 a barrel.