Gas Market
Contracts across the NBP prompt and curve moved up on Friday, with the near curve averaging gains of over 2.00p per therm. On the prompt, increases were driven by a downward revision to wind generation levels as well as an unplanned outage at the Visund production facility, which is expected to continue until July 31st. Day ahead increased by 2.25p day on day to settle at 75.23p per therm, while the Spot rose by 2.40p to finish at 75.40p per therm. A reported outage at the Australian Ichthys LNG terminal drove up East Asian LNG prices which may have indirectly supported the NBP curve on the day. However, an increase of feedgas nominations into Freeport on Friday eased supply fears across European gas markets, limiting gains. August-24 closed at 76.11p per therm, up 1.92p day on day, while October-24 posted the biggest gain across the curve, increasing by 2.11p to close at 83.98p per therm.
Power Market
Bullish momentum observed across the NBP near months fed into GB Baseload curve increases. August-24 posted the biggest gain of the day of £1.90/MWh to settle at £68.10/MWh. Further out, the upside was more limited with Winter-25 settling up by £0.42/MWh to finish at £84.83/MWh. Prompt contracts were also up on the day, with Day ahead increasing by £0.87/MWh to close at £73.90/MWh.
European carbon markets moved higher on Friday, unable to escape the influence of stronger gas and power markets. The Dec-24 EUA closed at €67.70 a tonne, up €0.62 day on day. In contrast, UK Allowances were in decline, with the Dec-24 contract finishing at £39.62 a tonne, down £0.27 day on day.
Oil Market
Continued hopes of a ceasefire in Gaza, which could ease the risk premium baked into oil contracts due to the geopolitical tensions in the Middle East, helped to drag Brent and WTI contracts lower on Friday. Better than expected U.S. GDP growth figures provided some initial uplift in the morning session, but these gains were soon overcome by the ongoing concerns surrounding weak Chinese oil demand. China’s total fuel oil imports dropped by 11% over the first half of 2024, adding to the concerns for China’s economic performance. Downside was limited however by threats to oil production from the wildfires in Canada. Front month Brent closed the day at $81.13 a barrel, down $1.24 on the previous close of $82.37. The September WTI contract made a similar day on day loss of $1.12 to close at $77.16 a barrel.
Markets this morning
The escalation of geopolitical unrest in the Middle East over the weekend between Israel and Hezbollah appears to be feeding into bullish activity across the NBP curve this morning, with an expectation that the unrest could impact shipping ability through the Red Sea. As it nears expiry, the August-24 contract last traded at 78.95p per therm, a level not seen since the end of June. Prompt activity is quiet, although the system is well supplied this morning despite low levels of wind in the power stack. Crude oil markets have also edged up this morning, similarly driven by fears of a widening conflict in the Middle East. Front month Brent last traded at $81.20 a barrel, up by just $0.07 on Friday’s close.
29 July 2024
