Gas Market
Market prices remained highly sensitive to geopolitical headlines and trade-war fears yesterday with choppy trade once again characterising the session. A proposed 30-day ceasefire in Ukraine hangs in the balance as the Kremlin said on Wednesday it was awaiting firmer details from Washington, with prices seemingly reluctant to fall by any meaningful degree until Russia demonstrates its buy-in to the proposal. The front month contract fell by 1.13p to end the session at 104.19p per therm, an increase of 4.1% week-on-week but still down by 22.5% month-on-month. The prompt market shed value despite forecasts of colder temperatures and lower wind speeds increasing gas-for-power demand levels from today, with higher Norwegian pipeline flows into the UK easing the pressure on the system. The Day ahead contract fell by 1.13p to settle at 105.63p per therm.
Power Market
Movements were mixed across the GB Baseload market on Wednesday. The front month contract ignored the direction of its NBP counterpart to edge up by £0.17/MWh and close at £85.18/MWh. The rest of the near curve followed the downward trajectory of the gas market, with the May and June contracts falling by an average of £2.86/MWh day-on-day. The prompt market was supported by a downward revision to wind power production levels for the remainder of the week, with the Day ahead contract increasing by £5.40/MWh as a result.
UK carbon allowances spiked on Wednesday after a news report suggested that UK-EU market linking was under serious consideration.
Oil Market
Mounting fears of an economic slowdown in the U.S. kept a lid on potential crude oil gains on Wednesday. Modest upside was gleaned from a weaker dollar, indications of cooling inflation in the U.S. and tighter than expected U.S. crude and gasoline stocks. Cooling inflation could mean lower interest rates in the future which would be a positive sign for demand levels. However, with OPEC+ increasing production output from April, it’s more likely that the global oil market will be long over the coming months, keeping a cap on price increases. The front month Brent contract closed the day at $70.95 a barrel, up $1.39 day-on-day. Meanwhile its West Texas Intermediate (WTI) counterpart posted a $1.43 gain to settle at $67.68 a barrel.
Markets this morning
As U.S. negotiators head to Moscow to discuss a ceasefire deal, Russian forces are advancing an operation to regain control of Kursk territory from Ukrainian forces. With no indication yet as to whether or not Putin will support an interim month-long ceasefire, NBP prices are this morning trading above their previous close. The front month contract last went though at 105.30p per therm, up 1.11p on yesterday. Prompt activity so far this morning has been limited, with the Day ahead contract last observed going through at 107.50p per therm, a gain of 2.43p day-on-day. Meanwhile, crude oil prices are steady after shedding just 28 cents day-on-day at the most recent trade.
13 March 2025
