Gas Market
Firm weather fundamentals and an unplanned outage at the Teeside Cats terminal stirred short-term upside on the NBP on Monday. Although the Spot market managed to edge down modestly, prompt contracts all posted gains. Despite temperatures being currently mild, a colder than normal outlook from mid-week in parallel with a drop in wind output over the corresponding period drove the Day ahead contract up by 1.50p day-on-day to close at 134.50p per therm. Gains were limited however as the outage at Teeside was reportedly resolved on the same day with output ramping back up. Movements were more mixed across the curve, with the near months edging up by an average of just 0.24p per therm. A robust LNG arrivals schedule over the coming weeks, particularly at the South Hook terminal, should ensure LNG send-out remains elevated in order to prohibit stocks from overflowing. However, concerns over storage levels still loom large.
Power Market
Movement across the GB baseload curve was mixed on Monday, with near months tracking the modest gains made across the NBP gas market. The March-25 contract increased by just £0.17/MWh while the April-25 contract made the biggest gain of the day, increasing by £0.80/MWh to close at £104.10/MWh. Day ahead edged down on a strong wind output forecast for Tuesday, falling by £6.64/MWh to settle at £112.00/MWh.
European carbon prices showed complete disregard for the gains exhibited across gas and power markets on Monday. Instead, carbon markets tumbled due to substantial levels of selling and concerns that U.S. President Donald Trump will levy new tariffs on EU exports to the U.S.
Oil Market
After what was a volatile session, oil prices ultimately eased on Monday, as markets reacted to U.S. President Donald Trump’s planned tariffs on Canada, Mexico and China. Prices initially moved up in the morning session on concerns over tight supply and a drop in imports from two of the main crude suppliers to the U.S. However, prices tracked back down when news reached the market that Trump had paused the new tariffs on Mexico for one month. OPEC+ ignored calls from Trump to boost supply and agreed to stick to current production targets at its most recent meeting on February 3rd. OPEC+ will begin increasing supply from April as previously planned. Front month Brent settled at $75.96 a barrel, down 80 cents day-on-day, and just a touch above the lowest close for a front month contract so far this year.
Markets this morning
The NBP curve opened lower this morning, although trade has been choppy. The March-25 contract last went though at 127.72p per therm, down 1.46p day-on-day. Activity on the Spot and prompt is quiet, although Within day could be supported by an undersupplied system when trade does get going. Flows via the Vesterled pipeline into the U.K. are reduced today while the Barrow North facility is reporting technical issues, with flows reduced to zero. Temperatures across the U.K are set to decline from tomorrow until Friday, while wind output is also expected to taper off from tomorrow for the rest of the week. Crude oil prices have edged down further again this morning, with front month Brent last transacting at a 97 cent discount to its previous close.
04 February 2025
