Price movements were mixed on Thursday across the NBP as the market remained tentative to geopolitical developments

Gas Market

The NBP curve remained tentative to the ongoing negotiations surrounding a possible ceasefire between Russia and Ukraine on Thursday, however heightened attacks between the two over the past few days has done little to support hopes of peace any time soon. Choppy trade activity ensued, but despite the volatility the near months managed to fall by an average of 1.66p per therm. A warmer than normal temperature forecast for the first half of April also fed into the front month weakness, with the contract making the biggest day-on-day loss on the curve of 1.87p to close at 104.33p per therm. The prompt market was also in decline on the day, driven by an upward revision to temperature and wind output forecasts for the remainder of the week. The Day ahead contract posted a loss of 5.02p to close out the session at 100.15p per therm.  

Power Market

An upwards revision to the temperature and wind output forecasts for the rest of the week weighed significantly on the GB Baseload prompt market yesterday. The Day ahead contract fell by 36.7% day-on-day to end the session at £61.49/MWh. Meanwhile, along the curve declines were more modest with the near months seeking direction from the NBP gas market. The front month contract closed down by £2.00/MWh to close out the day at £89.25/MWh. Carbon prices also fell in tandem with European gas markets on Thursday, giving back some of the gains experienced the day prior. The Spot EUA fell by €1.12 day-on-day to close at €71.48 a tonne.  

Oil Market

The front month Brent contract closed at $72.00 a barrel on Thursday, up $1.22 day-on-day and the highest close of the month so far. Heightened tensions in the Middle East as well as new Iran-related sanctions issued by the U.S. provided the upside. The sanctions against Iran target several entities including a Chinese oil refinery for purchasing and processing Iranian crude oil and numerous vessels and ship owners. This is the fourth round of sanctions issued by the Trump administration on Iran as part of U.S. efforts to reduce the country’s oil exports to zero. With further U.S. attacks on Yemen-based Houthis likely, unrest in the Middle East has escalated which has also been price supportive. The WTI contract for May-25 delivery increased by $1.16 day-on-day to settle at $68.07 a barrel.  

Markets this morning

NBP prices have opened stronger this morning, driven by further escalations of unrest between Russia and Ukraine. Ukraine has accused Russia of attacking its own gas pipeline at Sudzha which was a critical hub for Russian gas flows to Europe until transit was discontinued on January 1st of this year. The attack could diminish hopes of a return of Russian gas flows into Europe via Ukraine. The NBP front month contract last went through at 106.45p per therm, up 2.12p day-on-day, but 3.31p off the intra-day high so far. The Day ahead contract is also up, having last transacted at 106.00p per therm, an increase of 5.85p. Crude oil prices remain steady this morning, with the front month contract last trading at $71.85 a barrel, a decline of just 15 cents on yesterday’s close.