Near NBP futures posted significant losses on Monday

Gas Market

Nominations at the Freeport LNG facility in Texas increased to near full capacity over the weekend and NBP wholesale gas futures at the front of the curve fell by over 4.00p on Monday.  Forecasts for slightly higher temperatures for the week ahead also helped pressure the prompt and near months while LNG deliveries to the UK are expected to land on Wednesday after delays.  Recent strong winds have delayed deliveries to Milford Haven, on the South Wales coast but Port Authorities are confident ships will berth on Wednesday.  Dutch ports are also expecting several cargoes to top up LNG reserves over the coming days which helped improved market sentiment. At the close, February settled at 120.15p per therm, down 4.58p while the Summer-25 contract declined by 3.90p to 117.86p which is 5.44p above the winter contract.

Power Market 

Sharp declines to the NBP curve and lower carbon EUAs pressured GB baseload futures on Monday. The front month expires this week and eased by £2.85/MWh to close at £103.25/MWh. The March contract was also heavily traded on the day and settled at £94.85/MWh, down £3.15/MWh.  Wind forecasts were revised lower this week which provided some support to the Day ahead product yesterday which closed £15.25/MWh. Carbon EUAs eased back off their recent 15-month highs yesterday. Contracts out to 2027 were almost 3.0% lower on average at the close. European Allowances for 2025 yielded €2.40 to settle at €79.46 per tonne. UKAs moved in the opposing direction increasing by an average of £0.67 per tonne.  

 Oil Market

Crude oil prices softened on Monday after top U.S. AI companies posted record losses on Wall Street. A Chinese artificial intelligence application has overtaken ChatGPT as the top free application and caused doubts around U.S. dominance in the AI field while raising concerns for crude oil demand.  More bearish data arrived from China’s latest manufacturing data which was lower than expected and the PMI hit a five-month low in January. The Purchasing Managers Index for the world’s second largest oil user fell from 50.1 to 49.1 for January, a result below 50 normally represents a contraction in the economy. Trump’s threats to impose tariffs on imports continues to weigh on prices too and Brent settled $1.42 lower at $77.08 a barrel yesterday.  

Markets this morning

A number of unplanned outages have been reported by the Norwegian gas operator Gassco this morning.  The Troll, Karsto and Asgard fields are having process issues which could impact up to 26mcm for a day according to Gassco.  NBP futures opened lower, but the early losses have been reversed with February now 1.32p higher on the last exchange.  The contract expires on the ICE platform on Thursday so there may be an element of traders taking advantage of yesterday’s declines.  Carbon prices are steady so far, but Brent has added 61 cents to last trade at $77.69 a barrel.