Prices press lower amid renewed Russian-Ukraine peace negotiations

The market continued to press lower on Wednesday, posting reductions for the fourth consecutive session.

Renewed peace negotiations regarding the Russian-Ukrainian war continued to serve as a key source of pressure for curve contracts as risk premiums subside after a long period of stagnation in dialogue.

It’s unclear if both sides will agree to the US drafted 28-point peace plan as Russia and Ukraine are not in direct negotiations and European allies of Ukraine have voiced issue with several points.

Demand is now expected to average closer with seasonal norms until at least 10th December and steady supply from Norway, the UKCS and LNG Sendout should keep the British system well balanced.

The baseload power curve continued to fluctuate within a narrow range, not quite displaying the same bearish momentum as NBP counterparts.

Crude oil and carbon markets have not displayed the same downtrend as natural gas, which may be serving as a price floor, slowing the pace of losses on the power market.

Gas-fired generation continued to serve as the largest source of generation in yesterdays session, comprising 42.5% of the power mix, with wind at 28.1% and biomass at 7.6%.

Falling gas prices and small losses on the carbon market yesterday may have contributed to slightly lower costs for gas generation, meaning its role as the single largest source of power perhaps had a lesser bullish effect.

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Price commentary courtesy of Crown Gas and Power