The energy markets were broadly flat on Wednesday as progress in the peace talks appeared to have stalled

Gas Market

The energy markets in Europe opened the week softer after reports of progress in the peace talks at the weekend. The U.S. Secretary of State, Marco Rubio, said talks with Ukraine on the 28-point peace plan have gained momentum, but the details released were still minimal. Zelensky stated that it’s a critical moment for Ukraine as Trump tried to push a deadline of Thanksgiving Day for accepting the deal but there are still doubts as to whether the Ukrainian President can consider yielding territory to Moscow.  Having declined by around 2.50p per therm the front month clawed back some of the losses late in session to settle just over a penny lower, but still setting a fresh 21-month low.  A glut of LNG along with a higher revision to temperatures weighed on the prompt as the Day ahead product fell by 1.10p while product for the Balance of month shed 2.05p.

Power Market

GB baseload futures tracked movement on the NBP curve yesterday and contracts finished slightly higher.  The front month settled at £81.15/MWh which is just £0.15/MWh above the previous close. The summer-26 contract was marked £0.40/MWh higher and closed at £67.35/MWh. An early selloff in the carbon markets was reversed later in the session leaving EU allowances for Dec-25 and Dec-26 unchanged at the end of play. Baseload for the Day ahead unwound some of the premium gained during the previous session on the back of forecasts for increased wind generation. Levels of wind generation are to increase to 16.0GW or around 40% of supply for Thursday, up from around 11.0GW. The Day ahead contract settled at £82.45/MWh, down 6.6% or £5.78/MWh.

Oil Market

Brent for February delivery settled 22 cents a barrel higher yesterday after peace talks between U.S. and Russian representatives ended without an agreement. The issues of Ukraine not yielding territory and NATO membership continue to obstruct progress for a deal, but these are likely to be discussed further as the U.S.  envoy, Marco Rubio is to return to Ukraine for another round of talks with Ukrainian delegates. A positive result in the talks could see restricted Russian oil re-enter the market. The Energy Information Administration released its weekly inventory report yesterday which showed U.S. reserves of crude oil increased by 574,000 barrels in the previous week. Gasoline stocks showed a surprise build of 4.52m barrels which tempered gains on the day.  

Markets this morning

With Donald Trump trying to put a positive spin on the peace talks, NBP futures have opened weaker this morning and continued to ease with January, the front month, down 1.41p per therm at 71.75p. Contracts covering the remainder of the winter months are all over a penny lower while the Summer contract is down 0.73p. Contracts on the prompt screen are also down significantly with the Spot last exchanging 2.20p lower at 70.70p. The gas system is showing a healthy surplus and Gassco have reported the unplanned outage at the Troll plant has been resolved. Crude oil prices have increased this morning after overnight attacks on Russia’s oil infrastructure by Ukraine. Brent last traded at $62.84 up 17 cents a barrel.