Gas Market
NBP contracts opened firmer again on Wednesday morning, with the new front month September-24 trading a high of 87.24p per therm before retreating back slightly to close at 86.98p per therm, a day on day increase of just over 2.00p. Risk associated with the recent escalation of tensions in the Middle East region and uncertainty around its possible impact on gas supplies appears to be the main cause of the price elevation. Gas-for-power demand levels were moderately high given the lower wind speeds, however this is expected to change into the weekend and next week as wind levels pick up. A fall in flows from the UKCS due to planned maintenance at two separate facilities was also a supporting factor for the Spot and prompt market. Day ahead increased by 3.00p day on day to close at 82.20p per therm, while Within day gained 5.10p to close at 82.60p per therm.
Power Market
The continuation of the NBPs upward trajectory fed into gains across GB Baseload contracts on Wednesday. On the prompt, power for delivery next week was the only contract to fall day on day, as wind power production levels are expected to pick up after the weekend. On its final day prior to expiry the August-24 contract increased by £1.55/MWh to close at £70.90/MWh. The incoming front month, September-24, increased by £1.65/MWh day on day to close at £75.65/MWh.
Strength across the wider energy complex pushed European carbon prices to their highest levels in more than two months on Wednesday. The Dec-24 EUA increased by €0.65 a tonne to close at €69.30 a tonne.
Oil Market
Front month Brent rose by 2.6% on Wednesday on rising geopolitical tensions in the Middle East. The ongoing weak economic signals from China, the world’s largest crude oil importer, wasn’t enough to stave off the influence of the recent events in Iran and Beirut as the heightened unrest in the region provided a moderate level of supply risk. U.S. government data showing a fifth straight week of stock declines, the longest streak of drawdowns since January 2021, also added to the upside. Front month Brent closed the day at $80.72 a barrel, a day on day increase of $2.09. Movement on front month WTI was similarly strong, with the September-24 contract increasing by $3.18 day on day to finish at $77.91 a barrel.
Markets this morning
The NBP continues its upward climb this morning, with September-24 most recently assessed at 88.01p per therm, a 1.95p increase on the previous close. Geopolitical uncertainty and price sensitivity to any potential supply disruptions continue to provide support despite otherwise stable market fundamentals. Prompt activity has been limited so far this morning, although Day ahead has exchanged at 82.90p per therm, an increase of 0.70p day on day. Crude oil markets have also extended Wednesdays gains on potential disruption to oil supplies due to the escalation of tensions in the Middle East. Front month Brent last traded at $81.41 a barrel, up $0.69 day on day.
01 August 2024
