Gas Market
NBP gas prices fell back into negative territory yesterday as above-average temperatures and strong wind generation contributed losses on the prompt. The Day-Ahead contract declined by 5.33p to 102.95p/therm. Meanwhile, gains from the previous session along the forward curve were erased following a White House announcement suspending military aid to Ukraine, which could force Ukraine to accept a ceasefire deal sooner without the requested security guarantees. A statement from a Ukrainian official claimed that Ukraine would run out of crucial US equipment stockpiles by the Summer. NBP near-curve forward contracts dropped by an average of 3.4%, with the front month contract down 3.59p to settle at 103.57p/therm. The Irish government approved the development of a facility for importing and storing LNG. The facility will provide an alternative source of gas if Ireland was to experience interruption to gas supplied by the subsea interconnections.
Power Market
GB baseload power futures tracked movements in the NBP gas market, with all contracts posting day-on-day losses and remaining relatively flat compared to last week. Prices had risen on Monday following the fallout from Friday’s events at the White House. Adding further pressure to GB Baseload prices, the UKA carbon market saw a decline, with the Dec-25 contract dropping 4.9% from Monday’s close. On the prompt market, the Day-Ahead contract fell by over 13% as wind and solar generation were forecast to exceed seasonal norms for the rest of the week.
EUA carbon prices were hammered yesterday as the Dec-25 contract followed movements on European gas markets mid Trump tariff concerns and Ukraine peace talks
Carbon was also tracking gas markets as the Dec-215 contract fell by 2.4% in early trading before recovering to close at €73.73/tonne, down 0.19% from last Friday’s close.
Oil Market
Oil prices fell on Tuesday, settling near multi-month lows after reports that OPEC+ plans to proceed with output increases in April, along with news of U.S. tariffs on Canada, Mexico, and China, as well as Beijing’s retaliatory measures. Brent crude for May delivery declined by $0.58 to $71.04 per barrel, reaching its lowest level since September 2024. The new tariffs are expected to slow economic growth and weigh on fuel demand. Additionally, OPEC’s decision to implement an April oil output increase of 138,000 barrels per day. This is the first step in a series of planned monthly hikes aimed at unwinding nearly 6 million barrels per day of production cuts, equivalent to approximately 6% of global demand and marks OPEC’s first increase since 2022 adding further downside risk to oil prices.
Markets this morning
The NBP continues to display volatile characteristics as prices veered from day-on-day losses to gains in early trading. May-25 breached the 100p/th level, hitting a low of 99.89p only for prices to trade over 4p higher less than 10 minutes later. The front month contract Apr-25 traded to a low of 110.25p and has last exchanged hands at 103.54p, a loss of a mere 0.03p. Oil continues its decline following yesterday’s announcement that OPEC+ is to increase production from April onwards. Carbon prices are trading than Tuesday’s close but are retreating from earlier highs reflecting the early morning volatility on European gas markets.
Yesterday in Summary
Energy prices were back in negative territory yesterday as markets reacted to multiple announcements from the White House, including a suspension of military aid for Ukraine and an escalation of the trade war with tariffs imposed on Canada, Mexico & China. Front month NBP shed 3.59p to settle at 103.57p/therm. Front month Brent reached its lowest settlement price since September of $71.04/bbl, declining $0.58 day-on-day. Strong wind and Solar generation weighed on GB baseload prompt prices as the Day-ahead closed 36% lower than rates recorded in early February.
05 March 2025
