Further reductions reported amid healthy supply outlook and strong storage levels
The NBP sell-off continued into Monday, with the front-winter contract declining by a further 1.4% when compared to Friday’s close, marking a 7-day streak of reductions with key contracts now at new lows.
A robust and diverse supply outlook and resilient storage fundamentals continue to help. US-Ukraine talks in Florida were described as ‘productive’ by the US Secretary of State and envoys of the Russian and US Presidents are set to hold talks in Moscow today (2nd Dec).
While some points, particularly regarding territory in the peace plan remain contentious, the reopening of dialogue is being taken as a positive signal that an end to the conflict is on the horizon.
A more decisively bearish session for baseload power prices, with curve contracts following NBP counterparts lower, despite a slight increase in demand for gas-fired generation.
The carbon market seemingly lost bullish momentum and retreated from Friday’s close just below yearly highs, posting modest losses of 0.7% by Monday’s close (data from ICE).
The share of wind in the GB power mix saw a noticeable decline (35.7%) vs Friday’s session (46.1%) but still remained the largest source of generation despite a slight increase in overall system demand.
Lower gas and carbon prices however, helped to ease the costs associated with slightly higher CCGT (Combined Cycle Gas Turbine) output.
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 