Gas Market
Gas markets across Europe recovered most of the previous session’s losses amid forecasts for cooler weather and uncertainty around storage reserves. Europe’s gas in storage was just below 52% of capacity yesterday compared to 68% at this time last year. Meanwhile there was some uncertainty around U.S. LNG exports after China vowed to impose tariffs on U.S. LNG, however, the latest data for January showed almost nine out of every ten LNG shipments from the U.S. were landed at European ports. It’s expected to be a cold start on Thursday which coupled with forecasts for below average wind generation pushed up the Day ahead and prompt prices for next week. Near curve futures for the NBP recovered most of Wednesday’s losses as March, the front month settled 3.82p higher at 130.47p per therm.
Power Market
A reversal in direction in wholesale natural gas prices along with higher carbon provided the upside to GB baseload futures yesterday. The front month clawed back £2.50/MWh on Wednesday having shed £3.55/MWh during the previous day. Further out, the Summer-25 contract was assessed £1.90/MWh higher at the close as the contract settlement was £98.15/MWh. Carbon EUAs were less than a half a percentage point up yesterday. However, there were significant gains to UKAs as contracts for 2025 and 2026 added £1.66/ tonne on average as speculators bet on prices moving higher. Baseload for the Day ahead increased marginally with low wind forecasts for Thursday expected to see generation remain below the seasonal norm at around 5.8GW.
Oil Market
With a possible trade war looming, crude oil prices eased on Wednesday with Brent shedding $1.59 to close at $74.61 a barrel. The retaliatory tariffs proposed by China on U.S. imports of oil are unlikely to impact the market in the long term. China, the world’s second largest consumer of crude oil imported just 254,000 barrels per day on average from the U.S. up to November last year compared to average daily imports of 11.0m barrels. It is likely that U.S. crude oil exports to China will be redirected to Europe if the tariff war escalates. OPEC+ are due to start unwinding the voluntary production cuts from April and this extra supply is likely to pressure prices although a final decision may depend on Trump’s proposals for increased sanctions on Iranian oil exports.
Markets this morning
Wholesale gas prices have continued to edge higher this morning with near months an average of 2.30p per therm up on last nights close. Prompt prices have also added premium in early trading with the Spot and Day ahead almost 2.00p higher with latest trades for both products going through at 136.25p. GB gas demand is a touch higher for today, but the system is operating in equilibrium with LNG send out at 81mcm for today while imports through Langeled nominated at maximum levels. Brent has recovered some of yesterday’s losses, last trading at $75.17 a barrel after reports that Saudi Aramco, Saudi Arabia’s state oil company, increased its crude oil price for March.
06 February 2025
