Gas Market
UK gas prices showed mixed movements yesterday, with the front-month contract hitting an intra-day low of 107.07p/th before closing the session up 0.50p at 112.83 pence per therm. Further along the curve, the Summer 25 contract followed a similar path, eventually settling up 0.19p at 112.93p/th. Meanwhile, the NBP Day-ahead price retraced some of its recent gains, settling 1.95p/th higher at 112.20p/th. The increases, largely confined to the near curve, were likely driven by tightening market fundamentals in the coming days and newly approved EU sanctions package against Russia, imposing restrictions on servicing oil and gas refineries but stopping short of a full ban on Russian LNG. The ripple effect across the summer months reflects ongoing concerns for gas supplies and storage that will persist until a resolution to the war in Ukraine appears imminent.
Power Market
Day ahead baseload prices surged in trading on Monday due to a reforecast to wind generation for the coming days. The lates forecast now predicts wind generation to be 10-20% below seasonal norms with the GB market relying on gas fired generation to meet more of the demand. As a result day ahead increased by £25.00/MWh at the close. On the curve, prices finished strongly having tracked NBP gas prices lower across the morning before the late gas rally saw March increase by 3.3% while the rest of the curve finished flat day on day.
Carbon was also tracking gas markets as the Dec-215 contract fell by 2.4% in early trading before recovering to close at €73.73/tonne, down 0.19% from last Friday’s close.
Oil Market
Crude oil prices remained steady on Monday after Friday’s decline as the market assessed developments surrounding the war in Ukraine and their potential impact on oil supply. While an end to the war and the lifting of sanctions on Russian oil could shift market dynamics, it may not lead to an immediate boost in global supply. As a member of OPEC+, Russia is already operating under voluntary production cuts established in 2023 and repeatedly extended, meaning sanctions relief alone is unlikely to prompt higher output. However, a resolution to the conflict would ease geopolitical risks. Supporting prices yesterday was the announcement of new sanctions on Iran’s oil sector, while the return of Iraqi oil exports from the Kurdistan region limited upward momentum as it raised concerns for global oversupply.
Markets this morning
Near curve NBP gas contracts are down an average of 2.00p so far this morning, as contracts followed a similar path to yesterday morning’s early losses. Very little movement on the prompt with the day-ahead down 0.20p at 112.00p/th and within-day contract yet to trade. Gas for power consumption is up on the back on lower temperatures although supply flows remain steady with no unplanned outages reported. Brent crude remains flat, with the front month contract down $0.07c at $74.71/bbl. Losses among Carbon EUA contracts are tracking gas markets down, with Dec-25 shedding 49 cent a tonne in early trading.
25 February 2025
