Gas Market
Dwindling gas reserves combined with cooler forecasts and an extended outage paved the way for strong gains to NBP futures on Monday. An unplanned outage at the Barrow treatment plant is likely to curb gas flows until Friday, however, the impact is just 6mcm. European gas in storage dropped below the 50.0% mark at the weekend which gave the bulls a run from the get-go on Monday. Its widely accepted that there is enough gas in storage to see out the remainder of winter, but it’s the premium the current summer price has over next winter that is a concern to the market. After yesterday’s close, Summer-25 was almost 7.00p above the Winter-25 price. The front month settled 5.50p higher at 141.25p while the prompt also racked up strong gains with the Day ahead settling at 144.90p, the highest settlement for two years.
Power Market
Baseload futures settled around 3.0% higher yesterday with strong gains to gas and carbon providing the support. The front month, March, added £3.78/MWh to settle at £115.00/MWh. The Summer-25 and Winter-25 contracts increased by similar amounts to close at £106.20/MWh and £108.05/MWh. Carbon EUAs fell back off earlier highs on Monday but still posted gains of around 0.7%. The Dec-25 contract settled at €82.47, up 53 cent per tonne.
Wind generation is expected to drop below the seasonal norm across Europe while in the UK levels should fall below 10.5GW for Tuesday. The drop in forecast was enough support the day ahead but strong gains on the NBP prompt also added to the upside for the power prompt.
Oil Market
The recent declines in crude oil prices encouraged some buying activity on Monday which sent Brent $1.21 a barrel higher. It was the largest one-day gain for the global benchmark since mid-January and seemed to go against market sentiment. The recent volley of trade tariffs being levied by the Trump administration could escalate to a trade war which would cool global trade and slow oil demand. Tighter supplies may have added to the upside on Monday as Iranian crude oil exports are targeted by U.S. sanctions. Meanwhile sanctions on Russian oil exports are also impacting global supplies but Trump said over the weekend that the U.S. is making progress in talks with Russia to end the war with Ukraine, although he did not provide any details.
Markets this morning
NBP futures have opened lower this morning with March, the front month, down by 1.51p per therm to 139.74p. Near contracts traded lower earlier with March dipping to 138.68p before all contracts rebounded off the early lows. The GB gas system is comfortable this morning with demand pitched at 306mcm for today and LNG send out is almost 90mcm. Gassco have posted an unplanned outage at Oseberg earlier but expect this to be resolved by tomorrow. Brent has continued to climb this morning as supplies are expected to tighten following the recent U.S. sanctions on Iran and Russia. Brent last exchanged at $76.89 a barrel, up $1.02.
