Prices edge higher amid a fall in renewable generation

Gas prices edged higher at the NBP on Monday, with market participants eyeing stalled US-Iran diplomacy and the resulting disruptions to LNG supply via Hormuz.

The US midterm elections, scheduled for 3rd November, are increasingly being viewed as a potential pivotal point for peace negotiations.

While Iran claimed at the recent UN General Assembly that it wishes to secure a deal before the elections for the sake of political cohesiveness, US President Trump stated that he believes Iran is “waiting to see” how he performs in the vote before a deal can be reached.

Reflecting how intraday volatility has cooled off moving into this week, the Winter 26 front-season contract is being offered 2p/therm (0.07p/kWh) lower when compared to its previous settlement, at time of writing.

Tracking gas, baseload power prices edged higher on Monday, with a notably tighter generation mix offering support to the near-curve.

Wind output weakened from 28.8% of the stack on Friday to 17.4%, while gas-fired generation climbed from 32.3% to 42.1% to become the single largest source.

That pushed renewables down from 49.9% to 39.9%, lifting gas-for-power demand and giving both markets a firmer footing to start the week.

With the winter season beginning on Thursday and storage still well below normal for the time of year, any further run of low-wind days is likely to keep the prompt well supported.

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Price commentary courtesy of Crown Gas and Power