Gas Market
NBP gas prices changed direction again on Friday, with losses exhibited across the board. The global IT outage experienced on the day caused disruption across energy markets in the morning session, with trade activity reducing by 75% compared to Thursday. With fewer traders able to access the market as a result, those with access could have had a relatively larger influence over price direction. Stable supply levels despite some rerouting of flows to mainland Europe from Norway ensured the GB system was well balanced throughout the day. Wind generation levels on Friday were higher than normal, feeding into the weakness on the prompt. The biggest losses were seen across the prompt and near curve with front month NBP shedding 1.31p to close at 74.73p per therm while Day ahead was down by 1.65p. Further out, Winter-25 shed 0.62p to finish at 96.65p per therm.
Power Market
Movement was mixed across GB Baseload contracts on Friday as trading activity was low due to the global IT outage. Bearish pressure from losses across the NBP prompt gas market was at odds with upside driven by a downward revision to wind forecasts, although projections remained within seasonal normal levels. The August-24 contract shed £0.40/MWh to close at $66.35/MWh, while Winter-25 gained $0.42/MWh to settle at $84.25/MWh.
Movement was similarly mixed but rangebound across European carbon prices, with the Dec-24 EUA contract settling up by just €0.08 to finish at €66.03 a tonne. The EUA Spot traded sideways, making a small gain of €0.02 a tonne day on day. UK Allowances were weaker, with the Dec-24 UKA falling by £0.58 to close at £40.61 a tonne.
Oil Market
Crude oil markets fell to one-month lows on Friday as the market responded to renewed hopes of a possible ceasefire in Gaza. U.S Secretary of State Antony Blinken said a long-sought ceasefire between Israel and the Palestinian militant group Hamas was within sight, pointing to a potential easing of risk premiums linked to geopolitical tensions. A ceasefire could also mean an end to attacks on commercial vessels in the Red Sea by the Iran-backed Houthi rebels. A strengthening dollar added further fuel to the downside on stronger-than-expected data on the U.S. labor market. Front month Brent fell to its lowest level since mid-June to settle at $82.63 a barrel, a loss of $2.48 day on day. Similar losses were observed on the front month WTI, with the August-24 contract closing down by $2.69 a barrel to finish at $80.13.
Markets this morning
Friday’s downside has continued into this morning with market fundamentals remaining largely unchanged. Gas-for-power demand levels have increased due to lower wind speeds, however an uptick in supplies from Norway has largely countered this. Otherwise, ongoing maintenance outages are doing little to impact supply as the GB system is currently operating in a long position. News that loadings at the Freeport LNG facility in the U.S. commenced over the weekend appears to be feeding into weakness on the near curve. August-24 most recently traded at 72.82p per therm, down almost 2p day on day. Crude oil prices have edged up on Friday’s lows, with front month Brent last trading at $82.85 a barrel.
22 July 2024
