Contracts across the NBP gained value on Monday, with the biggest day-on-day gains seen on the prompt

Gas Market

NBP prices opened in positive territory on Monday and continued to gain ground throughout the morning before starting to decline during the afternoon session. However, prices changed direction again before the close, with November-24 ending the day at a 2.16p per therm premium to the previous close. Ongoing gas shortages in Egypt were raising the competition levels for spot LNG cargoes over the first half of the winter period which provided the upward push seen on the NBP near curve. The UK is on track to import the lowest level of LNG over October since 2016, with two LNG cargoes set to arrive over the remainder of the month. The Spot and curve were also bullish, with Within day supported by an undersupplied system, while Day ahead was supported by a downward revision to wind production levels and rising storage injections.    

Power Market

A downward revision to wind power production levels for the rest of the week supported the GB Baseload prompt, although forecasts still remained over 20% above seasonal normal levels. Day ahead increased by 31.3% day-on-day to end the session at £86.00/MWh. On the curve, contracts followed the direction of the NBP gas market once again, with the front month contract posting a day-on-day gain of £1.80/MWh to end the session at £87.05/MWh. European carbon prices shrugged off the upside on the NBP and TTF gas markets to make day-on-day declines. EUA’s for Dec-24 fell by €0.71 to close at €61.80 a tonne. UK Allowances didn’t escape the support however, with the Dec-24 contract gaining £0.92 a tonne day-on-day.  

Oil Market

Crude oil markets found modest support on Monday, although prices remained over 4.0% lower week-on-week. As fighting continues in the Middle East, markets remain concerned over an expected Israeli retaliation on Iran which still holds the possibility of impacting energy supplies from the region. U.S. Secretary of State Antony Blinken will make another push for a ceasefire this week as he travels to the Middle East, while U.S. envoy Amos Hochstein will hold talks with Lebanese officials in Beirut on conditions for a ceasefire. Front month Brent increased by $1.23 to close the session at $74.29 a barrel, while WTI for November delivery posted a $1.34 gain to end the day at $70.56 a barrel.  

Markets this morning

Although the Within day contract is yet to trade this morning, the GB system is currently undersupplied once again, which will likely support the Spot when it gets going. The near curve is trading sideways, with market fundamentals remaining largely unchanged day-on-day. The front month contract last went through at 100.20p per therm, an increase of 0.05p on Monday’s close. Oil prices have dipped slightly this morning, with front month Brent last observed at $73.90 a barrel, up 39 cents day-on-day. Renewed efforts by the U.S. to push for a ceasefire in the Middle East as well as slowing demand growth in China are limiting the upside from the ongoing geopolitical tensions and unrest.