Prices continue to push higher amid continuing geopolitical instability

The Summer 27 front-season contract continued to push higher on Thursday, in contrast with near-dated contracts such as November 26, which lost ground against the previous close.

Bearish near-term fundamentals, including milder weather forecasts, weighed on the front end of the curve, while contracts further out found support from continued geopolitical instability in the Middle East.

The Houthi–Saudi conflict remained a key driver; the Saudi-led coalition reported on Wednesday that it had intercepted a Houthi ballistic missile aimed at Riyadh, while the group claimed attacks on Saudi Aramco facilities in Dhahran and Riyadh amid the coalition’s ongoing air campaign in Yemen.

Threats to Gulf energy infrastructure and limited Hormuz LNG flows kept a considerable risk premium priced into longer-dated contracts.

Baseload power season contracts posted modest gains on Thursday, tracking Summer 27 gas higher as a fading wind profile lifted gas-for-power burn.

Wind’s share of the stack edged up from 43.9% to 45.0%, but output was heavily front-loaded, falling from over 60% overnight to around 25% by the evening peak.

Gas-fired generation filled the gap, rising from 20.6% to 22.5% and peaking above 35% in the evening, while lower biomass and solar output trimmed renewables from 61.7% to 59.8%.

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