Gas Market
A combination of supply concerns and heightened geopolitical tensions conspired to drive up NBP prices on Wednesday. An extension to an unplanned outage at the Norwegian Asgard gas field supported the prompt, while ongoing outages at Troll and Gullfaks exacerbated supply concerns. This, coupled with higher gas-for-power demand and cooler temperatures for the coming days, lifted the Day ahead contract which settled 8.40p per therm above the previous close. The Norwegian supply restraints also put storage levels for the remainder of winter under further scrutiny, which fed into upside on the curve. Meanwhile, a drone attack carried out on a Russian oil refinery by Ukrainian forces strengthened geopolitical risk, which also helped to push up the NBP near months. The front month contract increased by 7.36p day-on-day to end the session at 128.56p per therm, its highest close since November 2023.
Power Market
GB Baseload prompt prices were supported on Wednesday by below average wind output forecasts and a downward revision to temperature levels over the coming days. The Day ahead contract posted a gain of £18.54/MWh to close at £118.04/MWh. GB Baseload futures were similarly firm, with upside gleaned from a bullish NBP curve. The February-25 contract increased by £11.25/MWh to close the session at £115.75/MWh.
European carbon prices rose to new 15-month highs on Wednesday, supported by firmer power and gas prices as well as increased buying levels. Dec-25 EUA’s increased by €2.85 to settle at €83.22 a tonne.
Oil Market
A rise in U.S. crude stockpiles and easing concerns over Libyan supply weighed on crude oil prices on Wednesday, although losses were modest. Supply risk abated after Libya’s National Oil Corp confirmed that export activity was running normally after it held talks with protestors demanding a halt to loadings at one of its main oil ports. Limiting the downside however was U.S. President Donald Trump’s plans to impose 25% tariffs on oil imports from Canada and Mexico on Saturday, which could potentially lift U.S. prices should they come into effect. Front month Brent settled at $76.58 a barrel, down 91 cents day-on-day and 3.1% down week-on-week. WTI for March delivery made a loss of 60 cents on its previous close, finishing the day at $72.62 a barrel.
Markets this morning
After trading briefly below Wednesday’s closing levels, NBP prices are back in positive territory this morning. The ongoing outages at the Gullfaks, Troll, and Asgard gas fields continue to cause supply concerns while also putting storage levels under increasing pressure. The temperature forecast for next week has been revised down, while wind generation levels are expected to be between 10-20% below normal for the rest of the week. Prolonged colder temperatures and low windspeeds across Europe are also feeding into the support. Oil prices are little changed this morning as markets brace themselves for the potential implementation of Trump’s tariffs on Mexico and Canada over the weekend.
30 January 2025
