Gas Market
A late rally Tuesday saw European gas prices make notable gains from the previous session. Bullish sentiment was driven by heightened geopolitical tensions as the market awaited updates from the talks in Jeddah where Ukrainian and American officials met to negotiate a framework for a minerals deal and a ceasefire. The NBP front-month contract settling at 105.32p/th, up 4.51p and Summer 25 gained 4.19p to 104.19p/th. Meanwhile, colder temperatures forecast for the rest of the week and lower wind generation drove higher gas demand for power generation. This supported prompt prices as the Day-Ahead contract, which traded bullishly yesterday, rose 5.53p to 107.63p/th. An unplanned outage at the Asgard production field was extended by one day yesterday, providing further support to prompt prices.
Power Market
A bullish session for GB Baseload contracts across the prompt and forward curve saw prices follow gas upwards. Colder temperatures and lower wind generation continued to give support to the prompt, as the Day-ahead contract rose £4.75 to end the session at £96.00/MWh. Near curve forward contracts increased an average of £3.53 as a late uptick in NBP prices strengthened power prices.
EU carbon prices moved in the opposite direction to the rest of the European Energy complex bucking the trend on European gas and power market. The Dec-25 EUA contract halted 2 days of gains to finish the session down €0.51 at €68.60 per tonne.
Oil Market
Oil prices made minor gains on Tuesday, supported by a weaker U.S. dollar. The dollar index, which fell to new 2025 lows on Tuesday, boosted oil prices by making crude less expensive for buyers holding other currencies. However, further price increases were limited by growing concerns over a U.S. economic slowdown and the impact of trade tariffs on global growth. Trump announced additional 25% tariffs on Canadian steel and aluminium. The recent plunge in oil prices provided further doubt that OPEC+ would proceed with its plan to unwind voluntary reductions of oil output from April. At the close, the front-month Brent contract rose by $0.28 to $69.56 per barrel while WTI gained 22 cents to finish the session at $66.25 per barrel.
Markets this morning
President Zelenskyy announced that Ukraine was willing to accept a U.S. proposal for an immediate 30-day ceasefire. However, this has not led to significant market losses this morning. Traders are closely watching Russia for a response, as gas prices remain flat, with the front-month NBP April contract up just 0.13p per therm. Day-ahead demand is up 28 mcm/d on the back of continuing cold temperatures. While trading has been limited so far on the prompt, this increased gas for demand is likely to boost prices. Brent crude is up $0.72/bbl, supported by a weaker dollar. However, further gains are limited following an EU announcement of retaliatory tariffs against the U.S., escalating a trade war that could impact global economic growth.
12 March 2025
