Gas Market
British and European wholesale gas prices declined on Thursday morning, retreating from their highest levels in over six weeks reached on Wednesday. The drop followed a recovery in Norwegian supply after recent maintenance works as total Norwegian exports increased 85mcm/d following the end of a full shutdown at Troll and Kollsnes. The front-month NBP contract fell by 1.04p to 86.81p/therm, while the Winter 2025 contract slipped 0.91p to 96.29p/therm. On the prompt, the Day-ahead price dropped by 2.8% to 85.76p/therm, tracking losses on the NBP forward curve as Norwegian gas flows to the UK increased by 10 mcm/day and higher wind generation further reduced gas-for-power demand, adding to the more comfortable supply picture.
Power Market
GB baseload futures were pressured on Thursday by declines on the NBP and a decline in carbon prices. The front month contract declined £1.05 to £78.25/MWh while Winter 25 shed 1.5% to £87.19/MWh. European carbon allowance prices eased for a second successive session on Thursday, tracking gas lower as the Dec-25 EUA was down 53c to €72.21 per tonne, while UKA 25 slipped 3%, to £53.50/tonne, shedding some of the gains made since a UK-EU ETS linking announcement on Monday.
Oil Market
Oil prices declined Thursday, pressured by reports that OPEC+ is considering a potential production increase from July. Front month Brent fell by 47 cents, or approximately 0.7%, to settle at $64.44 per barrel, as markets reacted to the prospect of rising supply outpacing demand growth. OPEC+ is expected to discuss a possible 411,000 barrels-per-day increase at its upcoming meeting on June 1
st. The news added to bearish sentiment already weighing on prices following U.S. inventory data released by the Energy Information Administration on Wednesday. The EIA reported an unexpected build in crude and refined product stockpiles for the week ending May 16
th. U.S. crude inventories rose by 1.3 million barrels to 443.2 million barrels, defying analysts’ expectations for a 1.3 million-barrel draw. The surprise build reinforced concerns over near-term demand softness and further tilted market sentiment to the downside.
Markets this morning
Price movements have been muted this morning, with near-curve NBP contracts rising by an average of just 0.07p/therm. The UK gas system remains stable, supported by the return of Norwegian flows and a reduced local demand forecast for the remainder of the week. With fundamentals largely balanced, markets are likely to remain rangebound unless disrupted by an unexpected supply issue or a significant geopolitical development. Meanwhile, oil prices have continued their decline for a fourth consecutive session, as expectations of a potential OPEC+ production increase in July continue to weigh on futures.
23 May 2025
