Wholesale gas prices recovered yesterday with March increasing by 8.01p on its final day

Gas Market

  British and European wholesale gas prices rebounded on Thursday due to technical buying and strong demand. On its final day of trading, the front-month NBP contract rose by 8.01p to 106.79p/th, more than recovering the previous day’s losses. Prices had dipped below the 100.00p per therm mark for the first time this year late on Wednesday, but they rebounded as price triggers and increased buying activity emerged ahead of the March contract’s expiry. The new front-month April contract gained 8.31p, settling at 107.12p/th. Wind generation in February was down nearly 40% compared to the same period last year, leading to stronger gas demand for power generation. This, in turn, contributed to a surge in storage withdrawals, bringing EU gas storage levels below 40% on Wednesday.  

Power Market

GB baseload futures retraced losses from Wednesday and tracked NBP contract movements as the new front month contract April gained £6.35 to close at £87.50/MWh. On the prompt, gains were supported by downward revisions of wind generation and temperatures for the rest of the week. European wind generation in February is down 40% when compared to the same period last year and has placed a higher demand on gas fired generation which has helped dwindle gas stocks in storage. Increased hedging of March EUA options and a technical spike in gas prices saw both carbon EUA and UKA contracts settle higher on Thursday. The EUA Dec-25 contract was up €1.55 to settle at €72.91 per tonne. The UKA contract gained a similar £1.55 to close at £43.65 per tonne.  

Oil Market 

After hitting a two-month low on Wednesday, crude oil prices rebounded on Thursday as Brent recovered $1.51 to settle at $74.04 a barrel.  President Trump’s reversal of the Chevron license to operate in Venezuela could impact the country’s exports by up to 240,000 barrels per day.  The decision could also have a knock-on effect at Chevron’s refinery in Mississippi. The new U.S. administration have also committed to restoring Strategic Petroleum Reserves which fell to around 55% of capacity during Biden’s tenure. Restocking SRP would add to demand and support crude oil prices.  OPEC+ are due to increase production by 138,000 barrels per day from April but the group have rowed back on planned increases so far this year due fresh U.S. sanctions on Russia and Iran.  

Markets this morning

Yesterday’s bullish move continued into wholesale gas prices this morning as April, the new front month for the NBP, rose to 110.38p per therm.  However, the early gains are being pared back with some contracts moving into negative territory.  April last exchanged at 106.45p per therm, which is down 0.67p from last nights close or almost 4.00p below the morning high. The last trade for the Summer-25 contract is still 1.58p above last night’s close but the bid/ ask spreads suggest the next trade will be closer to 107.40p.  Carbon EUAs are also trading lower this morning with the contract for Dec-26 down 70 cent per tonne, while crude oil prices have yielded close to 80 cents a barrel.