October, the front month for the NBP, fell by almost 2.00p per therm on Tuesday

Gas Market

October fell by almost 2.00p per therm on Tuesday after adding almost 8.00p over the previous two sessions. The recent volatility due to fears of a widening of the conflict in the Middle East continues to underpin the market but the near curve reacted to strong gas supplies yesterday as Norwegian gas flows continue to ramp up after a prolonged maintenance run. Langeled flows were just below capacity yesterday, however late reports of unplanned outages at Karsto and Asgard limited losses on the day. While the front month settled at 85.16p, the Winter contract for the NBP declined by 1.82p to 91.79p. On the prompt the Spot shed 2.40p while Day ahead eased by just 0.15p.  Cooler temperatures for the end of the week could increase heating load while wind generation has been revised higher than original forecasts and could offset the extra demand.

Power Market

GB baseload futures eased in line with declines witnessed on the near NBP curve yesterday.  The front month, October, settled at £70.00/MWh having declined by £1.00/MWh on the day.  The Winter contract settled £0.75/MWh lower at £80.25/MWh while contracts further out were mixed.  Carbon prices were mixed on the day with EUA contracts for 2024 and 2025 closing marginally higher while UKA contracts eased slightly. Baseload for the Day ahead increased by almost £4.00/MWh on Tuesday as forecasts for wind generation deteriorate before improving for the back half of the week. Temperatures are set to fall towards the end of the week which could add to heating load and counter the higher wind speeds.

Oil Market

A fresh stimulus plan from China along with fears that Storm Helena would cause disruption to U.S. oil refinery activity in the Gulf region supported crude oil prices early on Tuesday.  Brent added $1.27 to settle at $75.17 a barrel yesterday, its highest settlement since early September as prices were buoyed by the latest and largest package of stimulus from the Chinese Government since the pandemic. The central bank of the world’s second largest oil consumer has cut interest rates along with loosening rules for mortgage lending in the hopes of turning the property market around. Concerns that the conflict in the Middle East would escalate also added to the upside, however, prices softened later after Storm Helena changed course and was now likely to miss most of oil and gas platforms along the Gulf coast.

Markets this morning

A short gas system along with unplanned outages at Asgard, Sleipner and Karsto has lifted gas prices this morning.  NBP prompt prices are up to two pence higher with the Spot last trading at 87.00p per therm.  On the curve, the front month is 2.34p up at 87.50p while the Winter contract last exchanged at 94.22p. Geopolitical tensions are also adding to the upside this morning as world leaders are due to discuss possible solutions to bring about a ceasefire as they meet in New York at the United Nations Assembly later.  In the crude oil markets, Brent is 13 cents down at $75.04 a barrel.