Gas Market
Tuesday’s weakness fed into gas prices on Wednesday as all curve contracts gradually declined throughout the session. The front month November contract opened in negative territory at 96.27p/th and gradually moved lower across the session before settling marginally higher than the low of the day at 95.58p. Gas prices fell as hopes of a ceasefire in Lebanon loomed over the market for much of the day, although no progress had been reported by the close. The decline was not limited to the near curve, with contracts further out posting the largest losses. Q1-25 fell by 1.91p/th to 99.84p the first time in two weeks the contract settled back below 100p as weakness was seen across the market. Prompt prices also declined amid a well-supplied system, that was over 18mcm oversupplied.
Power Market
GB Baseload power futures followed movements on the NBP and moved lower throughout Wednesday’s session. Contracts for delivery in 2025, similar to the gas market, posted some of the largest gains. Losses on the baseload curve were limited by an uptick in the UKA allowances market. The Dec-25 UKA contract increased by 2.2% in trading yesterday. The move higher in UKAs was replicated on the EUA market as spot, and futures contracts increased by an average of 3.8%. The move higher on the EUA market was neither driven by fundamentals or gas, with the move driven by technical trading and profit taking.
Oil Market
Crude oil prices rebounded in early trading on Wednesday morning following Tuesday’s losses. Front month crude traded as high as $78.02/bbl as markets remained wary of possible attacks on Iranian oil infrastructure. However, reports of rising US inventories issued by the IEA and forecast weak demand for oil weighed on prices, negating the risk to supplies. As a result, Brent crude fell in late afternoon. The market found some stability as it awaited news of the expected talks between US president Biden and Israeli Prime Minister Netanyahu. The front month contract remained range bound for the remainder of the session before settling at $76.58/bbl, a day-on-day decline of 60 cents.
Markets this morning
The NBP gas market has rebounded this morning following three consecutive days of losses. The front month is trading at a 2.23p/th premium to yesterday’s settlement amid colder temperatures and a failure for the ceasefire talks to materialise. The system, 18mcm oversupplied yesterday, is just 3mcm long this morning due to the increased demand associated with drop in temperatures. Crude oil prices are also trading higher this morning. The market remains wary of an attack on Iranian oil facilities while the impact from Hurricane Milton is also supporting prices with reports of gasoline being sold out at some Florida forecourts is supporting prices.
10 October 2024
