Gas Market
A reduction in geopolitical risk premium on Monday saw NBP curve prices retrace some of Friday’s gains, while weakness across the wider energy complex also played into the downside. Near months fell by an average of just over 3.00p per therm, while the Q1 25 contract shed 2.84p day-on-day to end the session at 108.67p per therm. A loss of over 6.0% across crude oil markets weighed on contracts further out, with the Winter-25 contract posting a loss of 1.77p per therm. Prompt contracts were also drawn in by the weakness, despite low levels of wind production on the system as well as reported unplanned outages at the Norwegian Kollsnes processing plant and the Perenco Bacton field. The Spot shed 1.75p to close at 106.50p per therm, while the Day ahead contract dropped by 0.80p to end the day at 106.70p per therm.
Power Market
GB baseload futures gave back some of Friday’s gains on Monday with near months averaging a loss of £1.30/MWh day-on-day. Weakness across the NBP curve fed into the downside, with the January-25 contract falling by £1.70/MWh to close at £96.60/MWh, while Q1 25 decreased by £1.55/MWh to end the day at £94.00/MWh. Forecasts pointing to well below normal wind output for this week and next, as well as cooler temperatures applied some upward pressure to the prompt.
European carbon prices ended Monday’s session in negative territory, having initially gained ground in the morning, only for weakness across the wider energy complex to take over direction. The Dec-24 EUA contract fell by €0.43 to close at €66.45 a tonne.
Oil Market
Oil prices tumbled by more than 6.0% on Monday, with front month Brent shedding $4.63 day-on-day to end the session at $71.42 a barrel, its lowest close since September 11th. Over the weekend scores of Israeli jets completed three waves of strikes against missile factories and predominately military targets, easing fears that Israel might attack Iran’s nuclear facilities or oil infrastructure. Crude markets remain highly sensitive to the ongoing unrest in the Middle East though, with prices being very much driven by the latest news headlines coming from the region. Further volatility is coming from the looming U.S. election, with the outcome of that looking increasingly uncertain. WTI for December delivery fell by $4.40 day-on-day to end the session at $67.38 a barrel.
Markets this morning
The NBP has opened in positive territory this morning, with the front month contract up by 0.94p on its previous close, while Summer-25 last went through at 100.50p per therm, an increase of 1.06p on Monday. Fundamentals impacting the curve remain largely unchanged day-on-day. Cooler temperatures and increased gas-for-power demand due to a low presence of wind on the system could lift prompt prices, although trade activity there is yet to get going. The GB system is currently long, showing a surplus of 1.5 mcm. Crude markets have opened flat on yesterday, with minor day-on-day increases driven by a U.S. plan to buy oil for the Strategic Petroleum Reserve (SPR). Front month Brent last went through at $72.04 a barrel, up 62 cents on Monday’s close.
29 October 2024
