NBP futures eased for a third session in a row yesterday

Gas Market

NBP futures continued to weaken on Tuesday as nominations at the Freeport LNG plant increased.  One liquefaction train commenced operations at the weekend, and it looks like the plant was intending to ramp up a second train with the increased nominations. The gas markets across Europe eased yesterday shrugging off the extended outage at Visund. Near NBP futures settled an average of 0.65p per therm lower yesterday with the Front month closing at 73.21p which is 7.64p down over the last month. The Winter-2024 contract yielded 0.72p day-on-day and has shed 6.09p for the last month.  On the prompt a short system curbed losses to the Spot while the Day ahead fell by 1.05p over the session.  GB gas demand picked up to 175mcm on Tuesday as wind generation eased.

Power Market

Near GB baseload futures tracked the fall on the NBP curve yesterday while longer baseload contracts were assessed higher based on gains to carbon.  The front month declined by £0.40/MWh to settle at £65.85/MWh while further out, the Summer-2025 contract added £0.60/MWh.  There was an unplanned outage on the IFA1 interconnector to France which curbed losses to the Day ahead which settled almost flat at £72.94/MWh. The recent fall in carbon prices was halted yesterday after speculation that prices had reached a new floor encouraged some buying activity. The Dec-24 and Dec-25 EUA contracts increased by 1.5% or 96 cent per tonne.  Movement on UKAs was more muted with contracts up an average of 7p per tonne. 

Oil Market 

A fresh six-week low was reached by Brent yesterday as the global benchmark slipped to $81.01 a barrel having yielded $1.39 over the day.  Yesterday’s loss brings the fall in price over the last three sessions to $4.10 a barrel which has brought the price level below the fifty-day average of $83.61 a barrel. Expectations for a ceasefire in Gaza gained momentum yesterday as talks between Israel and Hamas are mediated by Egypt and Qatar.  The Israeli president has indicated a deal could be imminent before he travelled to Washington and is expected to meet President Biden later in the week. Also weighing on crude oil prices yesterday was a stronger dollar and industry reports of a further drop in U.S. crude oil inventories last week.

 Markets this morning

NBP futures have softened this morning, and the front month has retraced most of yesterday’s gain. August last traded at 74.69p per therm which is 1.35p down on last night’s close. Further out, the Winter is 0.90p lower at 94.70p. Prompt prices are flat despite the GB gas system showing an early surplus while gas demand for today is pitched around 10mcm below yesterday’s level. Carbon EUAs have continued to ease this morning with Dec-24 and Dec-25 contracts down by an average of 48 cent per tonne.  Crude oil prices have continued to move sideways with Brent close to last night’s settlement at $85.10 a barrel.