News that OPEC+ was delaying its anticipated increase in oil production pushed Brent Crude prices higher which in turn supported NBP gas prices

Gas Market

Monday’s trading session was more evidence that crude oil and natural gas are making tentative steps back towards being increasingly correlated following the divergence in 2021 and the advent of the Energy Crisis. NBP Gas prices tracked bullish crude oil contracts higher as OPEC+ delayed its anticipated increase in production by a month from December to January 2025. The front month contract closed above 100p once again, increasing by 3.28 pence from last Friday to 102.46p/th. Also impacting on UK gas prices was an expected outage at St Fergus later in the month for corrective maintenance with no clarity on the duration at present. Prompt prices were tracking higher as gas for power demand remains high leaving the gas system undersupplied for much of the day. The current anticyclone that is present over Northern Europe continues to impact on wind generation.

Power Market

A high-pressure weather system continues to linger close to the UK impacting on wind speeds and supressing wind generation. As a result, wind is forecast 20% below seasonal norms, which is supporting GB Day ahead baseload prices. The contract increased by 5.2% settling at £111.00/MWH. On the curve the wider bullish energy complex supported contracts with the December contract the biggest mover yesterday. The front month contract increased by £3.20/MWh settling at £85.88/MWh.   On carbon markets, European carbon prices surged on Monday morning and held onto these gains throughout the session, supported by robust rises in gas and power prices.  

Oil Market

Oil prices increased by almost 3% in trading on Monday completing four days of successive gains. OPEC+ announced over the weekend that it would delay its production increase for another month. It had originally been due to increase production by 180,000 barrels per day from December, but weak demand and pricing has led to the delay. Commentators also noted that the group could also be delaying the increase until after the US presidential election when the victor is known and how the result might impact the demand outlook. Also contributing to the volatility and upward pressure is the view from the market that Iran may still be weighing up a retaliatory attack on Isreal. As a result, Brent front month crude increased by $1.98 to $75.08/bbl.     Markets this morning The UK gas system is undersupplied once again today which is helping to support prompt and near curve prices. Gas demand from power generation remains high as low wind speeds and widespread cloud cover impact on wind and solar generation. As a result, both the Within day and Day ahead gas contracts are trading higher. Oil markets are also marginally higher, but rangebound, as the US hits the polling stations today. Crude oil will likely remain rangebound for the coming days with an expected tight presidential race, the results of which may not be known for days, and a Federal Reserve policy meeting and China’s National People’s Congress meeting all scheduled for this week.