Gas Market
Following Monday’s decline, gas prices remained stable during Tuesday’s session. The front-month February contract opened in negative territory, but the downturn was short-lived. Supply disruptions in Norway, particularly at the Troll and Asgard gas fields, supported prompt prices and lifted the February contract above Monday’s close. Increased buying activity also contributed to the bullish sentiment, as the contract dipped to 120.00p/th in early trading – a key buying level for many traders ahead of its expiry on Thursday. By the close, the contract settled at 121.20p/th, marking a 0.9% day-on-day increase. Further along the curve, price movements were minimal, with Summer-25 closing at 117.77p/th, down just 0.09p/th from Monday’s assessment, while Winter-25 edged up 0.18p/th to settle at 112.60p/th.
Power Market
GB Baseload power futures rose in trading on Tuesday, driven by a sharp increase in the UKA market. The front-December UKA contract surged by over 13% after the Financial Times reported that the UK government is likely to advocate for a pricing linkage between the UKA and the EU’s ETS carbon credit system. The jump in UKA prices contributed an average uplift of £1.40/MW to GB Baseload power futures for the remainder of 2025.
On the prompt prices retreated as Day-ahead fell by £3.50/MW from Monday’s close. While wind generation remains strong, albeit slightly below seasonal norms, it has been sufficient to push prices back below the £100/MW mark.
Oil Market
The Brent front-month crude oil contract rebounded from a two-week low on Monday, rising 41 cents to settle at $77.49/bbl. Prices found support from reports of protests at Libyan ports, which could disrupt the loading of up to 410,000 barrels per day of crude oil. However, gains were limited by OPEC+’s spare capacity of over 5 million barrels per day, which could offset any supply disruptions. Weak PMI data from China, reported on Monday, also weighed on the market as traders assessed its potential impact on global demand. Meanwhile, market sentiment remained influenced by Trump’s tariff comments, with the White House reaffirming plans for tariffs on Canadian and Mexican imports, potentially disrupting cross-border energy trade.
Markets this morning
Ongoing outages at the Gullfaks, Troll, and Asgard gas fields continue to drive gas prices higher, as potential supply constraints to Europe add upward pressure. Adding to the bullish sentiment, a revised wind forecast across Europe suggests lower wind generation, which could increase gas-for-power demand. Prices along the curve are trading higher, with the combination of rising demand and potential supply shortfalls likely to place further strain on storage levels in the coming days. Meanwhile, crude oil prices are declining again following an increase in U.S. stockpiles. Market participants are also awaiting further developments on potential U.S. tariffs on Canadian and Mexican imports.
29 January 2025
