Gas prices broke through the 100p resistance level yesterday

Gas Market  

Gas prices broke through the 100p resistance level yesterday, as the NBP front-month April contract plummeted by 7.07p to 93.03p/therm, its lowest settlement price since September 2024. This selloff, which drove prices to new five-month lows, was triggered by reports that EU leaders were considering the resumption of Russian gas transit via Ukraine. Slovakia has been advocating for this move, fearing a loss of transit revenue. However, the European Commission has pushed back, remaining committed to phasing out Russian fossil fuel imports by 2027. Amid concerns that Slovakia and Hungary could obstruct efforts to boost military support for Ukraine and expand the European defence industry, EU leaders may now be inclined to seek a compromise. On the prompt, above seasonal average temperatures and the expected arrival of three LNG cargoes by March 9th pressured the Day-ahead contract, which settled 6.25p lower at 93.00p/therm.

Power Market

Near NBP futures plummeted through the 100.00p per therm barrier yesterday and pressured the front of the GB baseload curve.  The lead month, April, settled £4.05/MWh lower at £78.05/MWh taking the decline over the last three days to £8.95/MWh.  Prompt prices also eased on the day with the Day ahead product settling £6.06/MWh lower despite forecasts for lower wind generation on Friday. Wind is expected drop to around 6.0GW from 14.1GW on Thursday. Carbon prices continued to retract on Thursday as the Spot for European Allowances settled at a fresh low point for the year at €65.35 per tonne.  While the contract fell by €1.37 per tonne yesterday it is down almost 20% from the year high of €81.63 per tonne at the end of January.  

Oil Market

Oil prices steadied on Thursday, with the Brent front-month contract settling marginally higher, up $0.13 at $69.43/bbl. The U.S. announced a one-month tariff reprieve for Canadian and Mexican USMCA-compliant goods and services, adding to market uncertainty. Businesses and equity markets remain on edge, fearing a return to the chaotic decision-making of Trump’s first term. Adding downward pressure on prices is news that OPEC+ will proceed with its first output increase since 2022, scheduled for April. Meanwhile, limiting further declines are increased sanctions on Iran, part of the US President’s aim to exert maximum pressure on Iranian oil exports, as well as some technical buying, as Brent hovers around the $70.00/bbl level.  

Markets this morning

Yesterday’s steep decline to wholesale gas futures continued into this morning with near months opening lower and continuing to fall. The April contract for the NBP dipped to 88.71p before news of a massive drone attack on Ukrainian energy infrastructure started to filter through.  Early reports of damage to Naftogaz’s production facilities in Kharkiv sent prices higher with April peaking at 98.95p but gains have been pared back a touch with the front month now 3.37p up on last night’s close.  Carbon and crude oil prices have also ticked higher this morning, with EUAs up by an average of €1.40 per tonne while the May contract for Brent last exchanged almost a dollar higher at $70.39 a barrel.