Gas Market
The run of losses for UK and European gas prices which had brought prices down over 20p/therm since last Wednesday was halted late during yesterday’s session. The optimistic view that a ceasefire deal could lead to a return of Russian gas to the European energy market was dampened after Ukrainian President Zelensky postponed his trip to Saudi Arabia and stated that any deal negotiated without Ukraine would not be recognised. The NBP March contract settled up 2.18p at 117.9p/th. Prompt prices moved sideways as wind generation remained 20% above average, with the Day ahead contract falling closing at 118.40p/th. Meanwhile, a draft EU Commission document proposed more flexible gas storage targets to ease system stress during refilling. While this could help reduce pressure on gas prices, the proposal did not address demands from some EU countries, including Germany, to revise storage targets ahead of the Winter 2025 deadline on November 1st.
Power Market
Mirroring activity on the NBP gas market, GB Baseload contracts lost value in early trading as Russia-U.S. talks began in Saudi Arabia. However, a late surge in the NBP gas market, driven by Ukrainian President Zelensky’s cancellation of his planned trip to Saudi Arabia, helped baseload contracts recover, halting a four-day decline. Meanwhile, day-ahead power prices continued to drop, with wind generation forecasts remaining well above norms.
The Dec-25 EUA contract opened higher on Tuesday but later mirrored fluctuations in European gas hubs. After hitting an intra-day low, it rebounded to close at €75.43/tonne, aligning with the upward trend in natural gas markets, although posting day on day losses.
Oil Market
As negotiations between Russia and the U.S. commenced in Saudi Arabia, aiming to end Europe’s deadliest conflict since World War II, Brent crude prices rose for a second consecutive session. The front-month contract climbed $0.48 to $75.66 per barrel. Monday’s trading was supported by the impact of a Ukrainian drone strike on an oil pumping station along the Caspian Pipeline Consortium (CPC) pipeline. This pipeline, which transports oil from Kazakhstan to global markets, could see up to 30% of Kazakhstan’s exports—around 380,000 barrels per day—disrupted for as long as two months. However, gains were limited by ongoing concerns over weak global demand in 2025 and the ongoing Saudi-hosted talks. While Russia has taken a tougher stance in negotiations, market sentiment remains optimistic that progress could lead to the lifting of sanctions on Russian oil, potentially improving global supply.
Markets this morning
A volatile start to today’s session saw NBP curve prices initially trade higher by over 2p before dropping back down to just 0.1p/th below the previous close as of the most recent trade. Norwegian flow nominations to the UK are down 15mcm/d at 69 mcm/d due to a rerouting of these flows to the TTF which is now trading at a slight premium to the NBP. Crude oil prices have edged up this morning as traders remain cautious amid worries of oil supply disruptions in the U.S. and Russia, and as markets awaited clarity on the Ukraine peace talks. Brent Crude front month is up $0.57 to $76.41/bbl. Carbon EUAs are trading down with the Dec-25 contract last trading at €74.88 per tonne.
19 February 2025
