Near NBP futures settled an average of 3.95p per therm higher on Thursday

Gas Market

Despite warmer weather, high storage levels, increasing Norwegian flows and higher wind generation, prices on the NBP forward curve continued to rise on Friday, driven by heightened geopolitical tensions in the Middle East. The NBP front-month November contract settled 2.32 pence at 102.60p/th up on Friday, marking an increase of 6.20 pence (6.43%) for the week. Concerns over an escalating conflict between Israel and Iran potentially affecting energy facilities in the region have provided significant support to oil prices, which have in turn fed into the risk premium for contracts on the NBP and TTF. The NBP day-ahead contract reached its highest level since December 5th, 2023 for the weekend at 97.79p/therm as the market waits for what the retaliation will be from Israel for the recent rocket attacks from Iran on the one year anniversary of Oct 7th.

Power Market

European energy contracts gained value on Friday amid rising tensions in the Middle East. GB baseload power futures all settled higher tracking the movements on the NBP gas market. NBP front month November climbed 2.3% or £1.90/MWh at £87.00/MWh.  Higher wind generation on day, helped push down power station gas demand from 42.9mcm/day on Thursday to 25.9mcm/day on Friday. Carbon EUAs were down with the Spot shedding 6.90% last week to settle on Friday at €61.14 per tonne. EUA contracts for Dec-24 and Dec-25 shed over 1.0% on Friday as the contracts settled at €61.59 and €63.51 per tonne.  Oil Market Crude oil prices settled higher on Friday posting the largest week-on-week gain since January 2023. The increases on the day were curbed by a ramp up in output from Libya and calls from the U.S. President, Mr. Biden for Israel to consider alternative targets to Iran’s oil fields.  Israel continued to bombard Beirut and southern Lebanon on Friday while continuing with attacks on Gaza, but the market is awaiting their response to the Iranian airstrikes earlier in the week. A stronger dollar also limited gains to oil prices on Friday as Brent added 43 cents to settle at $78.05 a barrel but over the week was $6.20 a barrel up for the week.  Crude oil prices had increased by around 2.0% over the morning session but gains were pared back following the comments from Joe Biden.

Markets this morning

NBP futures have opened in negative territory this morning with November trading down to 99.76p before ticking back up over the last few trades.  The latest exchange for the front month was at 101.29p which is over a penny below Friday’s close.  Trading has been limited to the front of the curve with Summer-25 yet to open. The prompt is also slow to get going but a short GB gas system is likely to provide support this morning. The unplanned outage at the Troll field is down to a compressor failure and is due to be repaired by Tuesday according to Gassco, the Norwegian Gas Operator. In the crude oil markets, Brent is up almost a dollar on the first anniversary of the Hamas attack on Israel. The conflict has escalated with Israel bombarding Beirut as well as Southern Lebanon and Gaza over the weekend.