Wholesale prices increase amid EU energy policy changes

NBP gas prices corrected higher on Thursday as markets responded to key EU energy policy shifts.

Earlier this week the European Commission unveiled a roadmap to eliminate Russian energy imports by the end of 2027, then yesterday the European Parliament voted in favour of revisions to gas storage rules.

The mandatory 90% storage target by November 1st has been adjusted to 83% between October 1st and December 1st, with the mandate extended to at least December 2027.

These developments have introduced renewed uncertainty across EU gas hubs and the NBP, reflecting the deep interconnection of their gas systems and prompting market participants to reassess supply dynamics ahead of winter.

The power market advanced on Thursday, following typical gas-driven price dynamics, with small gains seen across the curve. The generation mix remained largely unchanged, as persistently low wind output continued to support gas-fired generation and imports.

A gradual increase in nuclear output also contributed to system stability, with a continued uptick expected into next week.

In other news, the UK and US signed a long-awaited trade deal on Thursday afternoon (BST) something that has been pursued multiple times without success since the UK left the EU in January 2020.

The precise details of the deal remain unknown and are expected to be finalised and released over the next few weeks.

The announcement came just days after the UK agreed a free-trade agreement with India that is expected to increase bilateral trade by an estimated £25.5 billion annually by 2040.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.

Price commentary courtesy of Crown Gas and Power