Volatility continued to characterize the NBP on Monday, with contract retracing much of the previous days’ losses during the session.

 Gas Market

Volatility continued to characterize the NBP on Monday, with contracts retracing much of the previous days’ losses during the session. After reaching an intra-day high of 121.53p per therm, the front month contract eventually settled at 119.51p per therm, up 2.52p day-on-day. Russian gas exports via Ukraine to Europe remain stable, despite the ongoing hostilities in the region. News that the Pluto LNG plant in Australia would be shut down for an unplanned period may have added some bullish sentiment during the session despite the volume impact being negligible. The elevated prices exhibited by the NBP recently has attracted additional LNG cargoes to British shores, with 10 cargoes currently expected to arrive between now and 5th December. LNG in storage is currently at 64% fullness.  

Power Market

A weaker wind forecast for the rest of the week fed into gains on the GB Baseload prompt market, with the Day ahead contract jumping from a close of £66.00/MWh on Friday to settle at £111.25/MWh on Monday. Volatility on the NBP gas market exacerbated gains on the near curve, with the front month posting a £1.50/MWh premium to its previous close, while the January-25 contract increased by £2.20/MWh day-on-day to close at £104.85/MWh. European carbon prices set a new 12-week high on Monday, only to fall back later in the session on the news of a possible ceasefire in Lebanon. EUAs for December 2024 ended the session up by €0.78 to close at €69.92 a tonne.  

Oil Market

Crude oil prices fell by over $2.00 a barrel on Monday as a potential Israel-Lebanon ceasefire deal eased concerns surrounding supply disruptions in the Middle East. While prices remained steady early in the session, once reports hit the market that Lebanon and Israel had agreed, “in principle”, to the terms of a deal to end the Israel-Hezbollah conflict, prices started to fall back. However, the ongoing intensification of hostilities between Russia and Ukraine limited the downside. Brent for January delivery fell by $2.16 day-on-day to settle at $73.01 a barrel. The WTI contract for January delivery posted a $2.30 loss to end the session at $68.94 a barrel.      

Markets this morning

As Russia continues to advance against Ukraine, Russian gas supply into Europe remains stable. Despite this, the NBP near curve continues its upward trajectory this morning, with the front month contract last transacting at a 1.49p per therm premium to Monday’s close. Temperatures in the U.K. have fallen, while a drop in wind power production is supporting high gas-for-power demand over the coming days. As a result, the Day ahead contract last went through at 120.25p per therm, up 1.15p day-on-day. Crude oil prices are steady this morning amid the possible Middle East ceasefire. Front month Brent last traded at $73.62 a barrel, up just 61 cents on the previous close.