Prices trade in rangebound fashion amid continued geopolitical uncertainty

The NBP continued to trade in rangebound fashion on Wednesday with the Winter 26 block closing just north of 150p/therm.

Market focus remains split between geopolitical uncertainty, specifically the progress of US-Iran peace talks, and mounting fundamental pressures.

Europe’s fifth heatwave of the year and falling wind output are driving up gas-fired power demand, effectively diverting critical volumes away from storage facilities.

As a direct result, EU storage sits at just 59.3% capacity, which is 13 percentage points below the same time last year according to the latest Gas Infrastructure Europe data.

UK power prices moved higher on Wednesday, following the gas price trend.

A key prompt driver was the disruption caused by a sharp drop in solar power during Wednesday evening’s partial eclipse.

The UK grid operator, NESO, initially issued an official warning to secure back-up electricity for when solar generation suddenly fell.

Even though NESO cancelled the warning at around 12:00 once enough supply was locked in, the initial supply scare was enough to keep power prices elevated throughout the session.

Indeed, the eclipse had a sudden, dramatic effect on British generation. Solar dropped by around 90% within just a few minutes, lining up with the 88-96% coverage of the sun.

Gas-fired power covered off most of the deficit, but rarely utilised pumped storage was also used to help offset the sudden drop.

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Price commentary courtesy of Crown Gas and Power