Early losses to the near NBP curve were reversed late in the session on Monday

Gas Market

  NBP futures opened the week softer and near month contracts shed around 2.00p by the mid-morning but failed to gain momentum as peace talks began in Riyadh. With no leaks from the meetings gas prices ticked up towards the close of play leaving April, the front month 0.18p above Friday’s settlement at 103.97p per therm.  Similar slight gains were posted by the rest of the summer months and it was the Winter-25 contract that recorded the greatest gain of the day, closing 0.60p higher at 107.61p. Mild temperatures have seen gas demand drop off recently and the GB system was comfortable yesterday which pressured the within price as it fell by 1.50p.  European gas in storage increased slightly over the weekend and up to six LNG deliveries are expected at UK ports over the next ten days while three are on route to European ports but it will be the outcome of the peace talks that will drive gas prices this week.  

Power Market

The late reversal to NBP futures came a little late for some contracts on the GB baseload curve on Monday as contract settle mixed. April held on to a loss of £1.07/MWh to settle at £88.96/MWh while the Summer-25 baseload power product closed flat.  Carbon EUAs moved sideways for the most part ahead of the week’s expiry for March options.  Contracts for 2025 and 2026 were up by 25 cent per tonne on average. Forecasts for wind generation to rise above the norm for Tuesday weighed on prompt prices as baseload for the Day ahead eased by £4.50/MWh.  Wind generation is forecast close to 9.0GW for Tuesday but is expected to ease over the week.  

Oil Market 

Crude oil prices ticked up by less than a dollar a barrel on Monday following reports that the U.S. president is set to announce secondary tariffs on Venezuelan oil.  It is believed Trump will apply 25% tariffs to countries purchasing oil from Venezuela from April 2nd. While it’s not clear how this would work, if it forces China and India to purchase alternative supplies the market could tighten and force oil prices higher.  Peace talks for a resolution to the Russia Ukraine war began in Riyadh yesterday and ran late into the evening with no updates given to the press. A broad ceasefire agreement could pave the way for a return of Russian oil to the market. Meanwhile OPEC+ plan to continue to increase output in May.  Production is to start increasing by 135,000 barrels per day in April as the group unwind the voluntary cuts started back in 2022.  

Markets this morning

A joint U.S. and Russia statement is expected this morning following talks to agree a ceasefire in Riyadh yesterday.  It is reported that Russia is seeking to gain control of four Ukrainian regions while expecting Ukraine forces to withdraw from occupied Russian territory. Despite this, the markets have opened softer with current trades for NBP front months around a penny down on last night’s close.  The prompt is also slightly lower with the Day ahead close to a half a penny down as GB gas demand expected to remain subdued while temperatures are above the seasonal norms.  Crude oil prices have consolidated yesterday’s gains with Brent up by 50 cents to $73.50 a barrel.