Tuesday’s weakness extended into Wednesday with NBP prompt and curve contracts reaching lows not seen since Mid-May

Gas Market

Prices across the NBP were once again in decline on Wednesday, with recent bearish fundamentals remaining largely unchanged. Stable supply coming from Norway and the UKCS, coupled with a long GB system provided downward pressure to the prompt, with the Day ahead contract closing at 71.00p per therm, its lowest close since mid-May and almost 10% lower since the start of the month. Losses continued further out, with near months falling by an average of 1.46p per therm day on day. Decreasing Asian LNG imports fed into the weakness on the near curve, however the market remains tentative to when the US Freeport LNG facility, which is currently operating under restrictions after Hurricane Beryl, will fully reopen to vessel traffic. The front month August-24 contract fell by 1.58p per therm to finish at 71.21p.  

Power Market

A downward revision to wind output for the next two weeks did little to support GB Baseload prices as losses across the NBP provided direction to price movements. August-24 shed £1.40/MWh to close at £63.50 while Winter-24 fell by £1.30/MWh to settle at £83.20/MWh. On the prompt, the Day ahead contract edged higher day on day on news of an unplanned outage at a 600MW coal-fired plant, settling at £71.00/MWh. Weakness across the wider energy complex fed into losses across EU carbon prices. The Dec-24 EUA shed €0.54 to close at €67.94 per tonne. UK Allowances followed suit, extending their recent losses amid speculative selling after last Thursday’s election. Dec-24 UKA fell by a pound to close at £42.25 per tonne.  

Oil Market

Cude oil prices edged higher on Wednesday as refineries in the US ramped up processing levels and gasoline inventories were reported to have eased, signaling stronger demand. The Organisation of the Petroleum Exporting Countries (OPEC+) released their monthly report yesterday which pointed to relatively strong growth in oil demand in 2024 and 2025, with their forecasts remaining unchanged month on month. Upside was limited on signs that energy infrastructure in Texas came off relatively unscathed from Hurricane Beryl. Negotiations to secure a ceasefire in Gaza will continue this week, potentially leading to a decline in risk premiums linked to geopolitical tensions. Front month Brent closed the day up by $0.42 to finish at $85.08 a barrel.  

Markets this morning

The NBP near curve has opened stronger this morning, with August-24 trading about half a penny higher than Wednesday’s close, last exchanging hands at 71.74p per therm. Prompt activity is muted, although the fundamentals remain unchanged on yesterday. The GB system is well supplied, currently operating in a long position. Temperatures are expected to remain below normal levels, while wind output is forecast to drop over the coming days, which could see demand levels rise. Front month Brent has made modest gains so far this morning, currently trading around $85.33 a barrel.