Norwegian maintenance continued to impact on gas supplies to the UK and the Continent.

Gas Market

The outage at the Kollsnes processing plant and the Troll gas field supported prices yesterday despite the UK system remaining over supplied for much of the day. The impact of the outage was more pronounced on the continent where the increase in prices on the TTF was greater than the 2.1% witnessed on the NBP Day ahead. Similar to Monday the prompt bull run fed through to the rest of the curve with the front month increasing by 2.85p/th to79.55p/th. On the far curve news that the lead contractor responsible for construction of the new Golden Pass LNG terminal in Texas has entered Chapter 11 added to the upward pressure. The new facility is a joint venture between Exxon Mobil and Qatar Energy, with the former committing to support the project through to completion despite the bankruptcy of the contractor. The facility was expected to produce LNG in the first half of 2025, but that will now likely be delayed.

Power Market

The upward momentum on the NBP gas market supported the GB baseload curve on Tuesday. Also supporting prices was a gain of 1.6% on the UKA carbon market. As a result, the winter-24 contract increased by £2.55/MWh to its highest point since early January, and was assessed at Tuesday’s close at £90.125/MWh. The Day ahead power contract fell day on day despite the increase in gas prices. Wind generation is expected to return to seasonal norms, displacing gas generated power. The EUA carbon market tracked European gas prices higher Tuesday afternoon, having remained relatively flat until midday. The Dec-24 contract hit 4 month highs before closing at €76.00/tonne.  

Oil Market

Driving season is scheduled to begin in the US with Memorial Day this weekend which historically signalled peak demand for gasoline in the States. However, there are fears that sales will fall below expectations due to inflationary concerns in the US, due to consumers are cutting back on spending due to the inflation. The drop in demand for gasoline will directly impact on the demand for crude oil in the world’s largest consumer of the commodity with concerns for global demand persisting. Figures released late last night by the American Petroleum Institute (API) showed a build in crude stocks increasing the worries for demand. As a result, Brent crude oil extended Monday’s losses yesterday and the Jul-24 contract fell by 1% to $82.88/bbl on Tuesday.