15 days of consecutive increases ends as NBP catches its breath

The NBP paused to catch its breath on Tuesday, with a swift downward correction ending a fifteen-session bull run.

The Summer 27 front-season shed 4.8p/therm (0.16p/kWh), pulling back from levels not seen for a summer contract since January 2023.

Favourable short-term demand forecasts and steady storage restocking were the main sources of pressure.

EU gas storage stood at 74.5% full on 19 October, 8.3% below the same point last year (82.8%), with the year-on-year deficit narrowing from around 13 points in late August as injections have continued while last year’s stocks levelled off.

Looking ahead, the latest run of our model points to higher average temperatures and stronger wind output next week, which should help to ease both gas and power system demand.

Tracking gas lower, baseload power pulled back from long-term highs on Tuesday as a stronger wind profile added downward pressure.

Wind’s share of the stack rose from 32.3% to 41.7%, displacing gas-fired generation, which fell from 32.6% to 26.1%. The shift was most pronounced during daylight hours, when wind averaged around 41% against 24% on Monday. Renewables climbed from 48.4% to 55.5%, despite a dip in solar output.

This morning, both markets have opened firm, with the bulls looking to reassert control. The NBP Summer 27 front-season contract is being offered circa 7p/therm (0.24p/kWh) above its previous settlement, although it is yet to trade at time of writing.

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Price commentary courtesy of Crown Gas and Power