Near NBP futures declined for a third session in a row yesterday

Gas Market

NBP futures settled lower for a third day on Thursday with the May contract closing with a loss of 2.36p per therm at 81.25p. It was the lowest settlement for May in almost a year and the contract did briefly trade below the 80.00p mark dipping to 79.92p. Reports that the EU is to present its plan to phase out imports of all Russian fossil fuels on 06-May prevented further losses on the day. The strategy will focus on increasing imports from Norway and build on supplies of LNG from the U.S. Temperatures are expected to rise above seasonal norms for the next few weeks which should temper demand for heating and allow for increased reinjection of storage reserves, however, seasonal maintenance works at Karsto is to commence at the weekend and could curb exports to Europe by up to 35mcm. The GB gas system was comfortable yesterday and prompt prices eased by around 2.00p.

Power Market

Near curve contracts for GB baseload power gave way to downward pressure from their counterparts on the NBP curve. The front month declined by £0.90/MWh to settle at £73.75/MWh and the Winter-25 contract was marked down by a similar amount and closed at £85.55/MWh. Wind generation is to increase by around 1.5GW for Friday but this is likely to be offset by lower solar generation. Baseload for the Day ahead was assessed lower at £81.46/MWh. After the recent gains in the carbon markets, there was a selloff on Thursday due to an element of profit taking. European allowances recovered late in the session leaving contracts 40 cent per tonne down on average, while UKAs settled £1.05/ tonne lower.

Oil Market

There was some optimism in the crude oil markets yesterday with reports that the U.S. and China could possibly negotiate on tariffs. After two days of declines, Brent added 43 cents to close at $66.55 a barrel yesterday. No details are forthcoming from either side in the tariff war, but statements from both parties have been encouraging. Some OPEC+ members have been pushing for over production to continue into June, with Kazakhstan wanting to prioritise its own agenda ahead of the group which is causing disharmony within the membership. OPEC+ relies on its unity for its policies to work and if members start to pull in different directions crude oil prices will weaken.

Markets this morning

The energy markets are flat this morning with little changed to provide direction. NBP futures have traded in a tight range so far as the last trade for May was at 81.24p per therm. The Winter contract has not seen much action so far this morning and last exchanged at 90.79p and this is typical for longer curve contracts too. Prompt prices are also moving sideways this morning and GB demand is pitched 15mcm lower at 171mcm for today. Carbon EUAs have recovered some of yesterday’s loss with contracts for 2025 and 2026 about 25 cent per tonne higher. In the crude oil markets, Brent is down 15 cents to $66.40 a barrel as the market weighs tariff uncertainty against concerns of oversupply if OPEC+ increase output in June.