NBP Gas prices declined for the second consecutive day

Gas Market

Gas prices fell further on Tuesday as the continued strong market fundamentals exerted pressure on NBP wholesale contracts. The front month October-24 contract fell for the second consecutive day, and losing 7.1% since Friday, settling yesterday evening at 89.37p/th. The losses were not only limited to the near curve as winter-24 briefly flirted with sub 100p prices before settling at 100.36p/th. A decline on global oil markets was also pressuring far curve contracts with the gas price for 2025 falling by 2.32p/th, settling at 99.03p/th, its first foray below 100p in a month. Gas supplies in the UK remain healthy despite maintenance on the Langeled pipeline severely reducing Norwegian gas deliveries into the UK. Despite the maintenance the system was 6.4mcm oversupplied at 5pm Tuesday which fed into the bearishness on the prompt and near curve.

Power Market

GB baseload curve contracts declined in trading on Tuesday. Weakness on the NBP gas market fed through to the power market as prices opened weakly and continued to slide throughout the day. AT the close the October contract had fallen by 4.00%. GB power prices were not only pressured by falling gas prices, they were also pushed lower by weak UKA carbon prices, with the greatest pressure on the far curve as summer-25 declined by £2.88/MWh. The EUA carbon market was also in decline on Tuesday, as the spot market fell to its lowest point in just over a month. Carbon credits were pressured lower by declining gas and oil contracts, and the entire energy complex declined in trading on Tuesday.

Oil Market 

Front month oil prices tumbled by over 4.85% as Bloomberg reported in the early afternoon that a deal was imminent that would resolve the dispute that has halted Libyan oil production and exports. Bloomberg quoted the Libyan central bank that the political factions at the heart of the halt in production were nearing an agreement. Closing at $73.75/bbl, the Brent crude contract fell to its lowest level since early December 2023, while the WTI contract at $70.34 was also at its lowest level since December 2023. Crude oil had opened weakly on Tuesday morning and was trading lower than the previous sessions close. Both Brent and WTI contracts were pressured by weaker than expected Chinese manufacturing PMI data, prior to the news emanating from Libya.  

Markets this morning

NBP gas prices have continued to move lower in early trading with all traded contracts opening lower this morning. Winter-24 is once again trading below 100.00p/th last exchanging hands at 99.60p/th, while October-24 last went through at 88.68p/th.  Warmer temperatures, high wind levels and a well-balanced system are contributing to the downside on the prompt. Although the Spot has yet to trade, Day ahead last went through at 87.75p/th, 4.30p/th lower on yesterday’s close. Crude oil is trading flat on yesterday with fundamentals remaining largely unchanged. Front month Brent last traded at $73.75 a barrel.