Planned maintenance on the Norwegian Continental Shelf was responsible for removing 63.6mcm/day

Gas Market

Planned maintenance on the Norwegian Continental Shelf was responsible for removing 63.6mcm/day from the supply mix yesterday. These absent volumes were the main contributor to the market upside, despite the UK system moving into a long position as the day progressed and demand levels being below the seasonal norm. The Day ahead contract moved up by 1.65p/th day on day. Curve contracts for the remainder of the year all settled over 2p/th above their previous close. LNG send-out remains weak, with just one LNG cargo expected to arrive into the UK over the coming days. With Asian countries still the most profitable for US LNG sellers, and prices rising, this may have also added to the increases experienced on the curve.

Power Market

The GB Day ahead baseload contract fell by 9.09% despite the moderate increases seen on the NBP, closing at £65.10/MWh. The losses were driven by a continuation of strong wind output forecast for the remainder of the week, as well as above normal solar output. Further out, near and far curve contracts tracked the gains exhibited on the NBP curve, with the June 24 baseload contract increasing by 1.51% day on day. Wednesday’s carbon losses were reversed on Thursday due to the upward pressure applied by increases on the NBP. The Dec-24 contract gained €1.66/tonne on the day. UKAs for 2024 were also up, increasing by 3.1% day on day.

Oil Market

Data released by the US government on Thursday saw a fall in crude stockpiles as refineries increased production. This news is typically price supportive for global crude prices, however a surprising rise in gasoline reserves showed demand for the fuel in the States was not as high as had been anticipated. As a result, both Brent and WTI front month contacts fell for the second consecutive session closing at $81.86/bbl and $77.91/bbl respectively. The data showed that despite the commencement of the driving and vacation season in the US, demand for gasoline fell by 2% from the previous week. The increase in inventories added to the concerns for inflation and higher for longer interest rates in the world’s largest consumer of oil.

Markets this morning

Following the expiry of the Jun-24 contract, Jul-24 takes over as the front month this morning. The contract has fallen by over 1.00p/th so far in early trading with the Q3-24 contract following suit. The UK system is long again despite the ongoing planned maintenance on Norwegian gas fields, while the minor outage at the Kollsnes processing plant has been extended once again. Prompt contract have yet to trade, although bid and offer indicate a flat market. Oil is marginally lower, but it too is essentially in a flat market as yesterday’s losses are consolidated.  Carbon is trading sideways despite the early declines on gas wholesale markets.