NBP prompt prices have opened lower, and the Spot is down by around a penny

Gas Market  

Lower gas demand due to the mild temperatures and increased wind generation pressured prompt gas prices across Europe yesterday.  The Day ahead price for the Dutch TTF fell by 3.16% while the corresponding contract for the NBP shed 3.71% or 4.63p per therm.  The declines on the NBP prompt kept pace with those witnessed on the continent to maintain the price difference to hold imports from Europe.  NBP futures weakened on the day too with near months falling by an average of 4.13p per therm yesterday.  Contracts out to next Summer where most of the premium had been added recently due to concerns over European storage levels, all fell by over 3.28p while futures from the winter out were down by less than two pence yesterday.  European gas in storage stands at 84.2% of capacity compared to 92.6% at this time last year.  

Power Market

GB wind generation is expected to climb close to 16.0GW on Thursday putting pressure on prompt prices in the process.  Baseload for the Day ahead declined by over 23.1% or £28.25/MWh yesterday, its the lowest level since the second week in November.  On the curve, lower gas and carbon weighed and January declined by £3.38/MWh, but the February contract posted the largest loss of the day closing at £99.28/MWh, down £3.57/MWh. It was a second day of losses for carbon as European Allowances fell by an average of 15 cent per tonne yesterday.  The Spot for EUAs settled at €67.89 per tonne while the Dec-25 contract closed at €70.16 per tonne as increased wind generation displaced gas fired units across Europe.    

Oil Market

Crude oil prices settled marginally lower after some early volatility yesterday.  Official U.S. jobs data is due to be released on Friday, but early reports are pointing to a drop in jobs added in November when compared to October.  Also in the U.S., the latest inventory report published by the Energy Information Administration showed a significant draw of 5.1 million barrels on U.S. crude oil reserves which would have provided price support, however, gasoline and distillate stocks increased over the week which countered the fall in reserves.  On the bears side, there were proposals to end the war in Ukraine floated by the Trump camp yesterday which include yielding ground to Russia along with no NATO membership for Ukraine. Brent settled with a loss of 31 cents to close at $73.31 a barrel.      

Markets this morning

GB gas demand remains subdued this morning and the National Grid are showing a large surplus of 19mcm against todays demand of 233mcm.  NBP prompt prices have opened lower, and the Spot is down by around a penny per therm in early exchanges.  January, the front month for the NBP curve is flip-flopping between gains and losses with the last trade going through slightly above last nights close at 117.33p.  The Summer contract is down by 0.36p at 108.31p on the last trade.  Brent has recovered some of yesterday’s loss as the February contract trades at $72.67 a barrel ahead of this morning’s OPEC+ meeting when the group is expected to maintain the current production cuts for the next three months.